(Closed) How difficult will it be for us to buy a house? (Self employed)

posted 6 years ago in Home
Post # 3
915 posts
Busy bee
  • Wedding: December 2012

If you are self employed you need to show two years worth of income (tax returns) before you can get approved. Your debt to income ratio should fall between 41-43% ideally. To get a good rate your credit score should also be a little higher. I would suggest saving for a down payment for two years and then you sould be fine, work on your husband’s credit as well, and make sure your your debt to availability doesn’t exceed 30%.

a large down payment will help with PMI but not so much to get you approved..it used to be that with a large down payment anyone could get approved, but the guidelines are very strict now.

Post # 4
772 posts
Busy bee
  • Wedding: December 2011

I’m curious about this too.  I hear it is harder when self employed, so I am interested in hearing stories 

Post # 5
4954 posts
Honey bee
  • Wedding: July 2012

When my ex and I bought our house in 2004, we had to jump through a lot of hoops THEN (and that was before the economy tanked). He was self-employed, but I was not. I had “regular” employment that could be tracked, etc. I know we had to have a ton of paperwork out the wazoo, but we were able to do it. Good luck!

Post # 6
5670 posts
Bee Keeper
  • Wedding: August 2010

Missloveknot is right. Darling Husband is self employed and anything we do for financing we do need to show 2 yrs of business tax returns. Unfortunately just a few months of being self-employed will not allow you to get a mortgage. Even if you weren’t self employed you must show job history.

Now when you say 6k of income per month is that after all of your business deductions? Most banks will go by your gross income after deductions, aka, the amount you pay tax on.

Post # 7
12905 posts
Honey Beekeeper
  • Wedding: November 1999

@Missloveknot:  You had exactly all the figures I was about to pay.


OP, if your mortgage payment + recurring monthly debt (student loans, car payments, insurance, utilities, credit cards, and any other liabilities) exceed 43% of your income, you are going to have a very hard time securing a loan.  In addition, your credit score is working against you because (at least in my area), they’re looking for scores 740+. 

If your husband has student loans that are in repayment, he has credit.  Those count towards credit scores!  He should definitely have his score run by a mortgage broker/lender when you’re serious at buying.

As always, you should talk face-to-face with a professional about your specific situation.  They will crunch the numbers and tell you what you can qualify for.

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