Is it hard for traders to get loans/credit?

Discussion in 'Professional Trading' started by dv4632, Nov 9, 2012.

  1. I'm in same boat in fact was going to talk to a lender this week.

    Right now I rent , am pretty liquid and have no debt.

    I either want a mortgage for a house to live in for myself or be able to start getting mortgages to buy rental property and then get some "stable cashflow" that way so in turn can get a mortgage for my own residence.

    I may have to start by buying the first rentals in cash which I don't really like the idea of considering rates are dirt cheap right now and over the long haul my rental cashflow with inflation would basically cancel out the interest.

    After a couple years of having a rental or two hopefully they would give me a mortgage.


    They give some guy with 80k in college and cc debt making 40k a year a mortgage but not a guy who can pay cash for the house!

    Who's to say I wouldn't get canned tomorrow if I go work at some Corporation? It's dumb
     
    #11     Nov 28, 2012
  2. would you loan money to someone who has, as the data shows. only a 10% chance of making money? i wouldnt.
     
    #12     Nov 28, 2012
  3. newwurldmn

    newwurldmn

    We're you showing 1mm in income? If you we're showing a 100k and asking for a300k loan it's not an unreasonable request.
     
    #13     Nov 28, 2012
  4. Unless the loan is unusually large, they'll just average your last two years tax returns and that's your income. No big deal. I'm speaking about mortgages. For most other consumer credit, they rarely verify income anyway and do it based on credit history.

    For landlords, the tax returns will suffice as well. Their margin of safety is mostly your deposit anyway.
     
    #14     Nov 28, 2012


  5. I could add this.

    When I was self employed, I used an employee leasing company. Basically I leased myself to my company, I recieved a W-2 from the leasing company on my income. (I decided what I paid myself). You do have to pay admistration fee for this but is deductible on your taxes.

    This worked out well, they took care of unemployment compensation . disability, health insurance and all taxes. if i hired an employee, I just added them on. The new employee was leased to me. The whole thing was wierd but worked out well.
     
    #15     Nov 28, 2012
  6. smart. Makes perfect sense, thanks for the idea!

    surf
     
    #16     Nov 28, 2012
  7. No friend, tax returns don't cut it any longer-- this is particularly true for the self employed. Banks caught on to the fake tax return scheme a long long time ago. Now, in 1995, you would be correct.

    surf
     
    #17     Nov 28, 2012
  8. I agree that a consistent deposited as "earnings" every month slightly helps paint the right picture. But to think that telling even the stupidest loan officer that you buy and sell securities and then giving him a tax return that shows you are not employed by a firm convinces him you are doing something other than trading seems naive. If you are dealing with large numbers they may simply not care that you trade but that is clearly not the OP's situation.

    What am I missing here?

     
    #18     Nov 28, 2012
  9. dealmaker

    dealmaker

    Use your tax returns if, you have been a profitable trader with large enough profit, last two years should suffice; as long as you don't have anything deregatory on your credit history.
     
    #19     Nov 28, 2012
  10. Wrong. Tax returns are no longer accepted as income proof for the self employed.
     
    #20     Nov 28, 2012