Does anyone have any experience in getting a mortgage loan to buy a house as a full-time trader (Schedule C, no W-2), especially if you have some losing years before being profitable? Thanks.
Just wait till you're really profitable as a trader...and buy the house with 100% cash up front. You currently have 2,666 posts. -- This is like the 3'rd 666 I saw online within the past 20 minutes. The other occurrences were within an eBay item number, and YouTube video count.
This can be a big issue, even for a consistently profitable trader, depending how you treat your income. If you elect to be an 'investor' on your tax return, the bank may not look at this income. Smaller, local banks seem to have the ability to look at the bigger picture and approve a loan here as opposed to the larger banks who may have more rigid requirements.
There everywhere, all the time, the more you notice the more you'll see, you of all people should get that LOL
For a conforming mortgage (ie one that is financed by Freddie Mac or Fannie Mae) you need 3 years of w2 income in an industry you have familiarity with. However, depending on the size of your mortgage, your net worth, and your total tax income, the bank can hold the mortgage inhouse. In that case they can do almost anything.
Are you not worried that your performance as a trader might diminish when you have the weight of a mortgage to pay off looming over your head? I sure know it would affect me.
The bank will require last 2 year tax returns and current year bank statements showing deposits. They want to know if you're capable of repaying the loan with new money not equity. If you are showing a loss, good luck and may the force be with you.
You won't get a mortgage based on trading income. Lenders term it investment income, and will not lend on it. Can't blame them. Your alternative is to create an entity and pay yourself a salary for a couple years, which can qualify as "earned income."