You’d think a doctor with her own private practice or a small business owner with a six-figure income would have no problem getting a mortgage loan. But think again. Increasingly, self-employed professionals — some of the smartest and most successful people in the U.S. — are being turned down on their mortgage loans.
While there are no hard numbers on how many self-employed professionals are being denied mortgage loans, The Wall Street Journal says that changes in the ways that lenders handle mortgage loans — specifically underwriting criteria — have resulted in an increase in the number of self-employeds being rejected for home loans.
The Journal lists “doctors, lawyers, accountants and small business owners” among the new group of self-employed borrowers who find it increasingly difficult to get a mortgage loan.
The Journal cites the case of Hubert Noguera, a 38-year-old small business owner in Saratoga, Calif. Noguera “can't get approved for a loan, even though he has a strong 800 credit score and is prepared to make a 40% down payment on a house near San Francisco in the $800,000-to-$900,000 range.” Noguera told The Journal he “has assets worth three times the $500,000 loan he's requesting and is in the process of selling his share of a recently inherited residence in Saratoga, Calif., worth $1.1 million.”