I’m self-employed and have taken out two loans: one to buy my place (with Downey S&L) and another to refinance it when rates dropped (I got a fixed loan at 4.75% with Wamu).
A stated income loan (AKA liar loan) means they don’t look at documentation like tax returns, W2’s (self-employed don’t get those), and others. Being self-employed doesn’t mean you need to go with a “stated income” loan. You can provide tax returns, 1099 forms, bank records, and of course your FICA score.
As for “having no sympathy for the self-employed” I’m assuming you mean only the ones who write off things like xmas trees and other non-business related items. Although there is great temptation to do this, a self-employed tax filing is an automatic red flag for IRS auditors. I write off as many deductions as possible (home office, business-related travel expenses, etc) but do it all legally and have nothing to hide when the auditors come a’ knockin’. I leave the white-collar crime to our elected officials.
