Posted on: 24th Nov, 2012 11:29 pm
I'm self employed, so I'm already at a disadvantage, but I've got plenty of other negatives to go along with it.
My biggest issues are 1) balancing income to tax deductions, 2) high dti, 3) short job history.
I've been self employed since September 2011, one month after graduating with a masters. I filed 2011 taxes based off of only one quarter. I will be filing 2012 taxes ASAP with the hope of getting into a home in May 2013. I'll have two years of tax returns but only an actual income for 15 months. 2011 taxable income is $10,000. 2012 taxable income will be $85,000.
My credit score is 760. No credit card debt, but about $40,000 available. No car loans, but $1000 student loan monthly payment. I'm looking at homes around $150,000. Assets are around $45,000 (a bunch of man toys) with an additional $10,000 cash available for down payment. I've talked to a few loan officers who "say" I should be good, but none will commit to anything until after my taxes are filed.
I can easily afford the approximate mortgage, but my DTI back end ratio is VERY high because of the income based on 24 months v. 15.
My wife is a stay at home mom with no personal income and a lousy credit score.
I feel worried that I'm borderline at best as it is, but I also have another issue that is about to come into play. I need to finance a $50000 business expense that will add a $900 monthly payment. I would have to cosign on that note personally. I could wait until after getting into a home to purchase it, but it is to my advantage to buy it before Dec 31 of this year for tax purposes as it would save me close to $16000 in taxes through bonus depreciation. That would significantly cut into my down payment savings if I paid those taxes.
The easy answer is obviously to just wait it out for another full tax year, but my daughter is starting school next year and we don't want to move her. We would be moving to a different school district.
I don't know how much this would even factor into things, but my mother has said she would cosign on the mortgage if it helped. I don't know what her credit score is, but I would guess somewhere above 650. She has made a consistent $35000 a year for over a decade. Owns two paid for homes, stocks and no car debt for somewhere around $250,000 in assets. Very little cash. Not sure of any credit card debt but assuming maybe $200 per month.
So, what are my chances?
My biggest issues are 1) balancing income to tax deductions, 2) high dti, 3) short job history.
I've been self employed since September 2011, one month after graduating with a masters. I filed 2011 taxes based off of only one quarter. I will be filing 2012 taxes ASAP with the hope of getting into a home in May 2013. I'll have two years of tax returns but only an actual income for 15 months. 2011 taxable income is $10,000. 2012 taxable income will be $85,000.
My credit score is 760. No credit card debt, but about $40,000 available. No car loans, but $1000 student loan monthly payment. I'm looking at homes around $150,000. Assets are around $45,000 (a bunch of man toys) with an additional $10,000 cash available for down payment. I've talked to a few loan officers who "say" I should be good, but none will commit to anything until after my taxes are filed.
I can easily afford the approximate mortgage, but my DTI back end ratio is VERY high because of the income based on 24 months v. 15.
My wife is a stay at home mom with no personal income and a lousy credit score.
I feel worried that I'm borderline at best as it is, but I also have another issue that is about to come into play. I need to finance a $50000 business expense that will add a $900 monthly payment. I would have to cosign on that note personally. I could wait until after getting into a home to purchase it, but it is to my advantage to buy it before Dec 31 of this year for tax purposes as it would save me close to $16000 in taxes through bonus depreciation. That would significantly cut into my down payment savings if I paid those taxes.
The easy answer is obviously to just wait it out for another full tax year, but my daughter is starting school next year and we don't want to move her. We would be moving to a different school district.
I don't know how much this would even factor into things, but my mother has said she would cosign on the mortgage if it helped. I don't know what her credit score is, but I would guess somewhere above 650. She has made a consistent $35000 a year for over a decade. Owns two paid for homes, stocks and no car debt for somewhere around $250,000 in assets. Very little cash. Not sure of any credit card debt but assuming maybe $200 per month.
So, what are my chances?
Hi acropolisheadwear,
Self employment, high DTI ratio, and short job history - each of these will go against you when you apply for a mortgage. It is really true that it would have been better if you could wait for 1 more year and then apply for a mortgage after sorting out all the financial issues. Nevertheless, as your mother is ready to co-sign for the loan, you can apply for a mortgage with your lender. Contact the local lenders and check out whether or not you can qualify for a loan.
Self employment, high DTI ratio, and short job history - each of these will go against you when you apply for a mortgage. It is really true that it would have been better if you could wait for 1 more year and then apply for a mortgage after sorting out all the financial issues. Nevertheless, as your mother is ready to co-sign for the loan, you can apply for a mortgage with your lender. Contact the local lenders and check out whether or not you can qualify for a loan.
Thanks for the info Adonis!
Another question... If my mother does cosign, does her income and debt figure in directly? For example with my current figures, would my two-year income ($10k + $85k) and hers ($35k + $35k) simply be added together and divided over 24 months to come up with "my" monthly income? So, my monthly income ($3958) along with hers ($2916) would give us a total of $6874? Her debts would then figure in the same way? Am I looking at this the right way? I really hope that's the case because that figure is much more in line with what I actually bring home.
Another question... If my mother does cosign, does her income and debt figure in directly? For example with my current figures, would my two-year income ($10k + $85k) and hers ($35k + $35k) simply be added together and divided over 24 months to come up with "my" monthly income? So, my monthly income ($3958) along with hers ($2916) would give us a total of $6874? Her debts would then figure in the same way? Am I looking at this the right way? I really hope that's the case because that figure is much more in line with what I actually bring home.
Hi acropolisheadwear!
Welcome to forums!
If your mother co-signs for the loan, then both her debts as well as income will be taken into consideration by the lender when considering you for the loan.
Feel free to ask if you've further queries.
Sussane
Welcome to forums!
If your mother co-signs for the loan, then both her debts as well as income will be taken into consideration by the lender when considering you for the loan.
Feel free to ask if you've further queries.
Sussane