Ask HN: Freelancers in the US: How do you succeed in getting a mortgage?

Post by cylinder » Fri, Jul 17, 2015, 4:27 PM UTC

davismwfl wrote: post #10

cylinder wrote: post #7

Two years tax returns. Don't call yourself a freelancer or even self employed. Say "I work for OP Consulting LLC, here are my pay stubs, this is my salary."

Don't do this. Most of the financial forms now ask if you own more than X% of a company (I think 10-20%), and you must list which one if you do. Plus you sign an IRS form that allows them to pull your prior tax returns, in which case they will likely see the corporation or partnership forms, meaning you just lied to the bank. While rarely is it prosecuted and rarely do you get in any real trouble, it is technically a…

I don't advise lying, I didn't know the forms ask that question. Anyhow, the discrimination against the self-employed is ridiculous, especially with so many contract workers and freelancers out there and the spread of at-will employment means you can lose your job tomorrow even at a large company.

Post by davismwfl » Mon, Jul 20, 2015, 2:52 PM UTC

cylinder wrote: post #11

davismwfl wrote: post #10

Earlier quoted context omitted.

Don't do this. Most of the financial forms now ask if you own more than X% of a company (I think 10-20%), and you must list which one if you do. Plus you sign an IRS form that allows them to pull your prior tax returns, in which case they will likely see the corporation or partnership forms, meaning you just lied to the bank. While rarely is it prosecuted and rarely do you get in any real trouble, it is technically a…

I don't advise lying, I didn't know the forms ask that question. Anyhow, the discrimination against the self-employed is ridiculous, especially with so many contract workers and freelancers out there and the spread of at-will employment means you can lose your job tomorrow even at a large company.

Fair enough. And I totally agree with you that it is tougher on the freelancer or self employed and can be quite frustrating.

To your point, in my experience, when a bank evaluates your tax returns for proof of income, they use the net income, so after all deductions, to calculate your debt ratio. Yet if you were an employee they would use your gross income on the pay stub and then calculate your debt to income ratio. A lesson I learned at the wrong time, it all worked out but what a pain.

Re: Ask HN: Freelancers in the US: How do you succeed in getting a mortgage?

Re: Ask HN: Freelancers in the US: How do you succeed in getting a mortgage?