Business loans affecting home loans

Discussion in 'Business Operations' started by Kitman, Mar 19, 2018.

  1. Kitman

    Kitman LawnSite Member
    Messages: 180

    I’ve been getting conflicting information from my bank. I was told if my business loans were in the name of my Llc, they wouldn’t count them in my debt to income ratio. Another bank said they would. Any of you purchase or build a home recently? Did they count loans in your Llc or Corp. against you?
     
  2. Yenann

    Yenann LawnSite Member
    Messages: 8

    Yes the business loan will count. Why would you think it wouldn't? However- Bank will look at loan amount vs income of business
     
  3. Kitman

    Kitman LawnSite Member
    Messages: 180

    I wouldn’t because one bank told me it wouldn’t, hence the conflicting information.
     
  4. jc1

    jc1 LawnSite Silver Member
    Messages: 2,402

    Most likely if you have an LLC the loans reflect on your personal credit report. When getting a larger loan they will look at the debt to income ratio to determine the amount they will lend you. In my experience being self employed a vehicle loan is easy to get compared to a mortgage. Especially since the financial crisis.
     
  5. sailfish27

    sailfish27 LawnSite Member
    Messages: 247

    An LLC should have nothing to do with your loan and certainly not your debt/income unless you co-signed the loan personally. A loan to an LLC would also not effect your personal credit. Look no further than the President, he admits filing for bankruptcy many times and is still a billionaire. His companies filed not him personally. Many business owners have millions of dollars in liabilities that would make it impossible to qualify under the income/debt ratio guidelines if they couldn't keep their numbers separate.

    What did you use for collateral to acquire your business loan?
     
  6. larryinalabama

    larryinalabama LawnSite Fanatic
    Messages: 20,384

    Unless you have been in business several years and have been actually making money you will have to borrow against your house. But then it that already happened you wouldnt need a loan.

    You sign you pay one way or another.

    No doubt it can be hard to get started.
     
  7. jc1

    jc1 LawnSite Silver Member
    Messages: 2,402

    Most loans provided to an LLC are gauranteed by the managing member. So if it's a single member LLC the owner is securing the loan.
     
    13Razorbackfan likes this.
  8. JFGLN

    JFGLN LawnSite Bronze Member
    Messages: 1,212

    When I refinanced I was able to exclude my business auto loans from my personal debt to income ratio. Shop around for a local bank or credit union.
     
  9. Kitman

    Kitman LawnSite Member
    Messages: 180

    Thanks. Are you running as an Llc, Corp, or sole proprietor?
     
  10. JFGLN

    JFGLN LawnSite Bronze Member
    Messages: 1,212


    S Corp
     
    Kitman likes this.

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