They will make you fill out a form allowing them to look at what you claimed on your taxes the last two years. No it is not easy to get a loan with capitol gains as your income. The no-doc loan is history.
Off topic, you might be well advised to file as a trader so you can take loss years in their entirety and carry them back so you actually get a tax refund from the years you paid taxes on all of your winnings. Plus it counts as earned income so everything checks out when you go to get a loan. you aren't limited to taking a 3000 loss against other sorts of income/dividends/etc. You have to file for 2009 in your 2008 tax return.
With the right assest & credit score you can get a jumbo loan with 40% down and MIN DOCS. The banks are much more freindly toward new purchases then they are with refi's unless you are doing just Rate & term refi and no cash out. with 800 Fico , 40% you should have no problems , heck if u are in cali send me a pm i will do the loan for u.
The bank are doing the right thing here. Trading income is *very risky* because the market can change quickly. It's not like a doctor or lawyer earning $500k, who is very likely to earn the same or more next year and the year after that. One way to avoid this is to trade through a company and pay yourself a salary. The company has the risk and the fluctuations, and the owner (you) gets a steady high income year in, year out, which means you look like a very safe credit. IMO traders should pay cash or rent for any expensive property anyway - market conditions could change and your income may evaporate, for all you know. In that case the last thing you would want is a 7 figure loan during a real estate bust.
Besides, why do you wanna be long a 1.3 mill property that will fall another 30%+ before the market bottoms out? For high-end property, it makes more sense to rent. Yields are low on stuff like penthouses and mansions, and you don't have to pay property taxes, maintenance etc. You can move at short notice if your trading goes south for a while. Also don't forget the opportunity cost on your invested capital. If you can make 15% per annum on investment cash, then a $500k downpayment is costing you $75k in your first year alone, and $505,000 in missed profits within 5 years or purchase. You can rent a $1.3 mill house for maybe $40-60k per annum in most places. The mortgage alone ($800k) is going to cost that, then add on the $75k opportunity cost on the deposit. I.e. it's a bum deal. This opportunity cost for traders means it is INSANE to do anything other than rent in most real estate market conditions. The only time it makes sense to own property is when i) high-end real estate is at historically cheap valuations (e.g. 10%+ net capitalisation rates) ii) you are in a real estate boom, and can get low-downpayment deals, and real estate is not overpriced. In all other circumstances, renting is far better for a trader with volatile earnings and/or high returns.
Cutten...........a really good accurate analysis of why traders who use their capital everyday in the market should rent.......job well done
I have a good income (lower than yours), good savings (lower than yours), and an excellent credit score. I get loads of pre-qualified loans and pre-qualified credit card offers in the mail. In a postcard, Ford recently said I was pre-qualified up to $30k if I go buy a new model. My impression is that the consumer credit crisis is being sensationalized. Largely, the people who can't get loans are the people who shouldn't have gotten them in the ridiculously easy credit environment of the past few years. Millionaire traders buying million dollar homes is an unusual case that I don't think says too much about the mainstream consumer credit market.
To Cutten's point, why not just wait and collect your "sure thing" 500k for the next 3 years and then pay cash?