Self employed borrower with fluctuating income who is now on an upward trend looking to refinance

Chuck in Orlando, Florida called into the show with a special situation. Chuck has been a self employed business owner for the past ten years. He bought a house when rates were high at 8.5%. He has never missed a payment or paid late. Last year Chuck tried to refinance his home to get a lower interest rate. Because of the economy over the past few years and the loss of business he had a dramatic drop of income. As a result Chuck's request to refinance was denied because of his debt to income ratio. The majority of the debt being his home loan. Chuck's business has started to pick back up and things are going well again. He went from having very good income to a really bad income for about three years and now back to a decent income. Chucked called Robert Palmer to ask him if there are any options for a self employed borrow like himself to refinance and take advantage of today's lower rates?

Depending on what the 2011 income shows, the lender may be able to still work with someone like Chuck. Since 2011 income is on a upward trend it is possible that at RP Funding we can use only the 2011 income average and disregard 2010. If those figures are enough to get the debt to income ratio to work we can make an exception. A lot of banks require two year income history, but in a situation like this we can make an exception. If we look at the 2011 income and the debt to income ratio is still high then another option is to wait six months or so and include the 2012 income along with 2011 for income history. Since the trend is going up that should allow the ratio to fall enough to be able to refinance Chuck's home.