Conventional Mortgage Question...

[Tom P.]

Hello. I'm looking to purchase an investment home under contract. I have low DTI, high credit score (790+ FICO), and high amount of liquid assets. I'd rather go with a conventional loan to get a lower rate and fee. However, two things that are a big unknown and was wondering if this would automatically disqualify me... 1) I had a foreclosure on a condo that finalized in Feb 2019, so more than 5 years ago. 2) I work for myself and been doing this officially for 1 year only (prior to that I had a high W2 job). I did pay myself a salary last year and plan to do so again, but I won't be able to produce the standard, "...last two pay slips" type of documentation that normal conventional lenders want. Any thoughts or past experience from folks that were in the same boat? Is conventional feasible or am I relegated to Hard Money or NQM type loans? Thanks. 

[Jon Puente]

Hey Tom, 

Foreclosure will not be an issue if it is 4 years from discharge date on a conventional loan.  However, the self employment could (or could not) pose an issue depending on how much you pay yourself yearly and what you report on your tax returns.   A lot of lenders do want 2 years of self employment history, but sometimes you can get away with 1 year.   Long story short - it depends! lol

Great question!