Need Guidance on Finding Loan -- First Time Home Buyer

[Adrienne Anselmo]

Hello everyone, I've lurked for a long time and could use your advice. I've been a business owner since 2012 and I'm trying to determine the best path forward for me. I only have 20 days left to close. I would appreciate any insight.  

What are you trying to accomplish?
I am trying to secure funding for my absolute dream home by the closing date, in 20 days.  It is a perfect place to raise a family, much more affordable than where I currently live, and I can also expand my business in the new location. 

How are you trying to accomplish it? 
I am trying to accomplish it by finding a competent, serious, mature lender who will objectively assess my financial profile and if I am approved, will fund the deal by closing.  Someone who will review my documents and records, help me determine the best options, and pull the trigger. That is all I ask. 

What type of property have you made an offer for already? 

A single family home. 

Location of Property?

Pacific Northwest (message me for details).

Purpose of Financing? 

Purchase. 

Type of financing sought: 

Given the time constraints, I am at a point now where I'm open to virtually any type of conventional fixed or adjustable, private, or hard within reason. I did originally want a 30 yr fixed. But if the standards for that are beyond what I can satisfy, I am comfortable with ARM.

Current or prior ownership of real estate: 

Rented a home for last six years (perfect record). Now making the step into ownership. 

What is the offer price on the property?
$450k.

Anticipated or actual appraisal issues

An appraisal has not been performed yet, but I do not anticipate any major issues.  An inspection was performed and found nothing significant. 

Down payment or equity: 

20% ($90k)

Source of down payment funds, if applicable:
Own funds, inheritance, and some gifted. 

Income Source: 

Business owner. Event venue in retail entertainment industry (corporate events, birthdays, weddings and anniversaries, etc). 

Gross monthly income (optional): 
Varies between $16k-$22k/mo. 
Mean average of $19k/mo for trailing 12 months. 

Monthly debt obligations appearing on credit report:

$60/mo (one credit card, $2900 remaining balance)

I will also have some taxes owed for last year -- not on the credit report but can be gleaned from 2018 tax returns. Can be paid in full by closing, however, so will not be an issue. Same with card.

FICO?

Good (708)

Late credit cards, thin/no credit, Ch7 bankruptcy, Ch13 bankruptcy, foreclosure, short sale, etc, and how long ago the event was?

None. 

Additional details:

Tax returns:

2017 tax return: $60k gross, $2k net (startup)

2018 tax return: $180k gross, $119k net.

2019 tax return:  If I could file it now, it would be around $140k net. 

Bank statements:

Business checking: $10k current. No overdrafts in entire history.
Personal checking: $2k current. No overdrafts in entire history.
Personal savings: $91k current. One fluke overdraft event in entire history (time-lag with deposits), refunded by bank. 

Credit

708, was 712 before hard inquiries for mortgage loan. 

IRA
$95k. 

Inheritance Distribution for Three Years
~$400/mo.

Monthly mortgage affordability:

I have been paying $2400/mo renting for the last six years comfortably (flawless record). The total monthly for the home I want including taxes and insurance, based on every reliable calculator I can find, will be around $1800/mo -- far less than what I have been paying for the last six years.  

Problem:

- Here is how my current lender has described the problem. Because as a business owner I do not have W-2s, underwriters will be looking at my tax returns.  If I were to provide 2018 and 2019's returns, I would be netting $119k in 2018 and, based on the trailing twelve growth trend, I'd be at $140k in 2019. Alas, I can only provide 2018 and 2017. And in 2017, I was operating as a startup. 

Thus, underwriters will "have to" take 2018's net income and divide it by 24 months, rather than 12, diluting my factual monthly net income. It will return a result that literally does not reflect reality, namely, it will say I only make about $5k/mo. Proving to them that I make more than that via bank statement deposits is not an option, apparently, because they will "only" consider filed tax returns, and I cannot file 2019's returns until next year. 

- Lender says he is "not sure" if it will go through and he says there are probably ways but he doesn't know.  He is a great guy but he is also newer in the game and I just wonder if someone with more experience could see a way forward for me. I wish I had someone aggressive and serious who could pick this up and make it happen.

- It would be foolish for me to lose the home over something like this.