Getting a mortgage as a professional gambler

**tiny** · 10-27-2014, 11:28 PM

I filed last year (and will file this year) as a professional gambler and I'm looking to buy property sometime next year. Who here has gotten a mortgage as a full time professional gambler and what are were your experiences?

Thanks!

KJ · 10-28-2014, 12:28 AM

I have gotten two different mortgages as a professional gambler. My first in late 2009, I was required to put 25% down on a condo. Last year when I bought a house I put 50% down and took a mortgage for the remaining 50%. The 50% on the house was my choice, so I am not sure what I would have been required to put down. I really don't know if the 25% I was required to put down on my first mortgage was high or not? It was my first mortgage. That might have just been standard, first time buyer, with not a lot of credit history.

**MyCatsCalledEnrico** · 10-28-2014, 05:28 AM

Just save your money up and pay cash for it outright. More fun showing up with a briefcase full of cash.

**moo321** · 10-28-2014, 06:56 AM

It's hard. If you have filed your taxes for a few years, it will be easier, but in general banks are not favorable to self-employed people. Try to find a local bank that does portfolio lending. Also, if you can do FHA or another federal program, that can help a lot.

**MJGolf** · 10-28-2014, 07:09 AM

That's our business here. Not financing professional gamblers but mortgage and title services. You will need a minimum of two years tax returns reflecting your income. And you have to show (where we get punished as self employed) that your income can handle the payment AFTER expenses/deductions. So if you write off most of what you can, like we do, you still have to show sufficient income to make your payments. Self employed bottom line income on tax returns tends to be lower than the usual W-2 wage earner.

Moo is mostly correct above but while FHA has it's benefits (lower down payment requirements/lower credit score), it's not an inexpensive option now that MI lasts for the life of the loan if you borrow over 90%. 11 years if less. And Uncle Sam chose this year to remove that deduction from income taxes, though it had been that way since like, 2006. I thought Congress was going to get their head out of their ass and renew the deduction but they didn't. It really crimps what you can deduct from your taxes. PM me and I would be glad to assist. Give you more info. You have to realize that some lenders will NOT loan for policy reasons. Others DON'T care, provided you can prove the income.

Originally Posted by moo321

It's hard. If you have filed your taxes for a few years, it will be easier, but in general banks are not favorable to self-employed people. Try to find a local bank that does portfolio lending. Also, if you can do FHA or another federal program, that can help a lot.

**moo321** · 10-28-2014, 07:30 AM

Also, I would ask over at biggerpockets.com. That's a forum for real estate investors, and they probably have good experience with creative financing and problems that come up for self-employed people.

**Sharky** · 10-28-2014, 07:41 AM

self employed (consultants, contractors, 1099s , etc) generally need 3 years of W2s to 'prove' income...sucks

**Nyne** · 10-28-2014, 09:39 AM

I would also suggest trying to do your banking at a credit union if possible. This also goes back to moo's suggestion about finding a lender that will hold a loan in their own portfolio. I bought a house with a marginally sufficient W2 income (per the normal lending standards) and with absolutely no credit history. I was able to show a long history of automatic transfers to savings towards a down payment where the transfers plus my rent exceeded the mortgage payment. Ultimately my credit union approved me for a 30 year fixed loan at a reasonable rate with 10% down and no PMI, when other lenders wouldn't even consider me because of the lack of credit history.

**bigplayer** · 10-28-2014, 03:35 PM

Prior to 2008 was a piece of cake. Now it's much harder. As long as you pay your taxes and get your Schedule C business taxes prepared and certified by a CPA you should have no problem proving income. Previously you could just name an income number and get approved. Those days are long gone since the economic collapse of 2008.

**tiny** · 10-28-2014, 08:33 PM

Originally Posted by KJ

I have gotten two different mortgages as a professional gambler. My first in late 2009, I was required to put 25% down on a condo. Last year when I bought a house I put 50% down and took a mortgage for the remaining 50%. The 50% on the house was my choice, so I am not sure what I would have been required to put down. I really don't know if the 25% I was required to put down on my first mortgage was high or not? It was my first mortgage. That might have just been standard, first time buyer, with not a lot of credit history.

I bought a house in 2012 with a conventional mortgage (20% down) and was filing as self employed (owning a business) and didn't find it too difficult but I don't know if the process will be the same as a self employed business owner and a self employed professional gambler.

Did they require any type of documentation (like a loss and win statement) to prove your income or were tax returns sufficient enough?

**MJGolf** · 10-28-2014, 08:42 PM

Originally Posted by tiny

I bought a house in 2012 with a conventional mortgage (20% down) and was filing as self employed (owning a business) and didn't find it too difficult but I don't know if the process will be the same as a self employed business owner and a self employed professional gambler.

Did they require any type of documentation (like a loss and win statement) to prove your income or were tax returns sufficient enough?

It really depends upon the underwriter and the policy of the bank. For example, someone who relies upon oil royalty or working interest income can have a steady income great enough to repay any mortgage. And if you get a knowledgeable underwriter and bank, who is familiar with that lending, you have no issue. On the other hand, I have seen underwriters ask what is a seemingly stupid question to me, is that they want a guaranty of that income for at least three years. Really? It's oil in the ground? Who can guaranty that income for three years at the same flow and rate. But you can also get past it.

I would think that with sufficient income history AND manual underwriting.......and it may take a bit of supporting documentation on your part, you can accomplish your needs. But I also know some banks (and we are in the bible belt) that will NOT take into consideration gambling income. So like I said; please look for a lender and pre-shop......to try to find one that will assist you. This is NOT an easy question. We had an actual "bookie" here that got loans from banks; paid them back but ended up getting on wrong side of feds and the like when his wife was murdered and his life became public news. He stated his profession as professional gambler. So some would lend to him. Others stayed the hell away.

**tiny** · 10-28-2014, 08:44 PM

Originally Posted by MJGolf

That's our business here. Not financing professional gamblers but mortgage and title services. You will need a minimum of two years tax returns reflecting your income. And you have to show (where we get punished as self employed) that your income can handle the payment AFTER expenses/deductions. So if you write off most of what you can, like we do, you still have to show sufficient income to make your payments. Self employed bottom line income on tax returns tends to be lower than the usual W-2 wage earner.

Moo is mostly correct above but while FHA has it's benefits (lower down payment requirements/lower credit score), it's not an inexpensive option now that MI lasts for the life of the loan if you borrow over 90%. 11 years if less. And Uncle Sam chose this year to remove that deduction from income taxes, though it had been that way since like, 2006. I thought Congress was going to get their head out of their ass and renew the deduction but they didn't. It really crimps what you can deduct from your taxes. PM me and I would be glad to assist. Give you more info. You have to realize that some lenders will NOT loan for policy reasons. Others DON'T care, provided you can prove the income.

I've filed self employment taxes for the last nine years and was approved for a loan a few years ago so I understand the general process of getting a mortgage as a self employed individual. I guess I was just wondering if the process will be different once the lender sees that your profession is "gambling" versus something more socially understood, if you know what I mean.

I have W-2gs from jackpots; will this be treated similar to a regular W-2?

I have excellent credit and can put 20%+ down (depending on the house price).

**moo321** · 10-29-2014, 07:13 AM

Originally Posted by bigplayer

Prior to 2008 was a piece of cake. Now it's much harder. As long as you pay your taxes and get your Schedule C business taxes prepared and certified by a CPA you should have no problem proving income. Previously you could just name an income number and get approved. Those days are long gone since the economic collapse of 2008.

This is a really good point. Having a CPA audit your books could really help you get a loan. This is common with small businesses who are seeking a loan. Expect $100/hr+ for a competent audit, so decide for yourself if this makes sense.