Financing in Red Oak>Question Details

Angela Toliv…, Home Buyer in Mansfield, TX

I'm self employed. Any tips on getting financed?

Asked by Angela Toliver, Mansfield, TX Sun Aug 3, 2008

I want to purchase a home, but i'm self employed. My credit isn't that strong because when I started out I had to finance a lot of things. Now that I have a steady income flow, should I wait for two years to purchase, what are the lenders looking for?

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Self-employment income needs to be verified by tax returns, but it's not your AGI. Cash flow is king.
Waiting is not optional. The look-back is two years. Most lenders average your cash flow to figure what you can afford. An exception can apply to select lenders: if you became self-employed in the same "job" you were previously employed in by someone else.
Perfect credit is not required, but the lower your credit score, the higher your down payment. If it's below 580, your choices are non-existent or expensive.
Web Reference: http://www.Mortgages-TX.com
1 vote Thank Flag Link Tue Aug 5, 2008
Howl long have you been self-employed? Lenders usually like to see 2 years of income to determine your ability to repay the loan. What kind of credit card debt do you have? What kind of savings to you have for the downpayment? The best way to find out whether or not getting a loan is feasible is to consult with an established bank or loan broker. Let them know that you are considering making a purchase and want to know what would be required. Good luck!
1 vote Thank Flag Link Sun Aug 3, 2008
Lenders are looking for bank statements, credit score, debt ratio, tax returns. If your credit score needs improvement pay off debt not close any account this will increase your scores.
http://www.lynn911.com http://www.homes-for-sale-dallas.com
Web Reference: http://www.lynn911.com
1 vote Thank Flag Link Sun Aug 3, 2008
You better be able to show two years of employment.
Web Reference: http://GetPrequalified.com
0 votes Thank Flag Link Tue Aug 5, 2008
Stated loans not totally gone; however, they still exist. However, many people consider that they are self-employed if that is what they report to IRS. However, many people who work for a company and do not own 25% of it are considered by FHA and other lenders as non-stated borrowers. Among these would be mechanics who receive a 1099 and no W-2 or realtors.
Web Reference: http://www.timhunke.com
0 votes Thank Flag Link Mon Aug 4, 2008
good afternoon.....call me now to pre-approve ..almost 14 years experience. bob mcclure- mortgage now- farmington, michigan (248) 974-4444.i am licensed in your state and 18 other ones..and i can close you in your own backkyard......best regards........
0 votes Thank Flag Link Mon Aug 4, 2008
1. Credit Score
2. Documentation of your income......tax returns, bank account statements
3. Evidence that you pay your bills, pay on time, debt is manageable.
Meet with a loan officer and let them get your prequalified. NOW is the time to do it even if your purchase is still in the future. That way they can advise you if things are quite right now, how to get them in order. They can also tell you exactly what documentation you'll need to get your loan or what goals to shoot for.
Web Reference: http://www.teamlynn.com
0 votes Thank Flag Link Mon Aug 4, 2008
Bruce Lynn, Real Estate Pro in Coppell, TX
MVP'08
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Lenders are looking first of all at your credit score...if you do not have a 680 mid credit score I would recommend getting with an excellent credit repair company. The credit repair process takes about 120 days max and will definitly have an impact on whether you qualify and what rate you will qualify for. The second thing is tax returns...you will have to show at least one full year of tax returns and possible two. Please let me know if you need a referral of a credit repair company or if you need any additional information.
0 votes Thank Flag Link Mon Aug 4, 2008
Hi Angela,
Credit scores seem to rule the world these days. And, the days of stated income loans appear to be over. We're all having to document our income. Realtors are self-employed, too, so we're all in the same boat. Not every home purchase is done in 30 days. Many times we have to start working with a prospective buyer 1-2 years ahead of their purchase so they can get their credit in the best light to be ready to get the best deal on real estate. We're fine with that. Having the time to reduce your debt in the right way can improve your credit score dramatically, reduce the interest rate you'll be quoted, reduce the insurance on the house, and optimize your ability to reap all the benefits of home ownership. All Realtors have lenders that they work with all the time, who provide good service and counseling to our clients to prepare them for home ownership. You may even qualify for home loan assistance programs through banks, credit unions, your employer, or the government that you aren't even aware of until we start a dialogue.
Web Reference: http://www.judgefite.com
0 votes Thank Flag Link Mon Aug 4, 2008
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