(Closed) How the flip do I get a mortgage?!?

posted 4 years ago in Home
Post # 3
Member
1286 posts
Bumble bee

It’s hard when you own your own business. I had to get out in the real world and get a paying job for a year before they’d even look at my income. Credit was excellent, but that didn’t matter to them. 

it’s hard without a co-signer. Good luck.

Post # 4
Member
3724 posts
Sugar bee
  • Wedding: August 2013

I think the first step should be paying off the credit card debt. Also, if you have enough saved up to make a 20% downpayment on a reasonably priced house, you’re going to have a lot easier time getting a mortgage approved.

Post # 6
Member
1920 posts
Buzzing bee
  • Wedding: November 2013

@Lily_of_the_valley:  Ugh, that was a horrible time for me.  I am also self employed and I had to wait a year so I could show I was making enough money.  Like you, with deductions, it made it look like I made squat, at least not enough for a mortgage.  I also had to pay off credit card debt, which I lucked out because I graduated college that year and got gifts from family and friends which helped pay it off.  It is really rough being self employed and getting a mortgage.  It helped that my fiancee works for a company, but at the same time, he wasn’t there for 3 years yet so they couldn’t count his commission! Somehow in the end, it worked out.  Good luck!

Post # 7
Member
3574 posts
Sugar bee
  • Wedding: September 2011

I think the biggest issue is that you are both self employed.  It’s harder when one person is, but near impossible if you both are.  

Post # 8
Member
24 posts
Newbee
  • Wedding: September 2013

Check out Churchill Mortgage.   I’m a Dave Ramsey Fan and follower, and he endorses them.  They are not available in all states (they weren’t in mine), but they will forward your info onto one of their partners. 

I bought my house (first-time-homebuyer) at 25– they were so helpful, I had no idea the process or anything going into buying a house and not once did I have to ask my parents, boyfriend, etc. for help or advice. 

Also check into FHA loans– they are govenment funded and you only need 2.5% down and the interest rates are usually lower.

Good Luck!

Post # 11
Member
11284 posts
Sugar Beekeeper
  • Wedding: April 2012

@Lily_of_the_valley:  to be quite honest, you need to wait.  pay down that student loan.  get a few more years under the business and start to show more income.  even though your credit is good, the other factors make you very high risk. 

i would just save like crazy in the meantime for a solid downpayment.

Post # 12
Member
3281 posts
Sugar bee
  • Wedding: June 2014

When we went in to get a mortgage they said theres a ratio of debt to income and you’re monthly mortgage has to be like no more than 30-40% of all income minus all debt (my wording might be off but it has to do with debt). Luckily we just paid off both our vehicles and my e ring so we have no debt but they still would only give us a loan way lower than what we knew we could afford. They also said self-employed makes things more difficult, but there are tons of self employed farmers in the area (FH’s fam included) that get loans for nice houses. I’m not sure if their millions in machinery are used as collateral or something. But we’re only 20 and 21 working part time jobs and they gave us a loan so I’m sure there is some way to make it work, it might just take some time. Good luck!

Post # 13
Member
1114 posts
Bumble bee
  • Wedding: January 2010

@Lily_of_the_valley:  I had a similar situation when DH and I were buying our house. I have a good job and excellent credit, but DH owns his own business and he had moved over from Canada when we got married, so even though he had excellent Canadian credit, he had no US credit and we could not qualify with both of our incomes (even though his income is much more than mine).

I ended up having to find a bank that offered Portfolio Mortgages. Basically, they don’t sell the mortgages on the secondary market (Freddie and Fannie), rather, they keep them in house. This allows them to review each mortgage on a case-by-case business instead of just trying to fit you into the standard “income, credit score, debt” holes.

The interest rate was pretty high compared to conventional mortgages, but we were able to refinance a year later once DH had built US credit and we had filed US income taxes with his income.

Try googling “Portfolio Mortgage” in your area and make lots of phone calls. It probably took me 15 days worth of solid research and calling around before I found someone willing to review our paperwork.

Post # 14
Member
3221 posts
Sugar bee
  • Wedding: April 2015

I don’t know how it works in the US, but in Canada, you go to the bank for a mortgage, or you go to a mortgage broker that puts together your file and shops it at various mortgage lenders. The latter tends to be a bit more lenient, and will offer higher amounts, though I have a feeling that the mortgage brokers my friends have used perhaps fudge numbers a bit.

Post # 15
Member
1433 posts
Bumble bee
  • Wedding: March 2015

@mypinkshoes:  +1.  Over 400k is quite a lot, if I was a lender, I’d also be concerned if you would be able to make both your loan payments and mortgage payments on time.  Also not sure why you haven’t paid off the credit card debt if presumably you have the money to save for a down payment.

Post # 16
Member
300 posts
Helper bee
  • Wedding: November 2014

Paying down your school loan is your best option.  They’re one of the toughest forms of debt for borrowers to get rid of and that scares banks away!

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