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Posted in Mortgage
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Question By
Ladybat

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1 Person Helped
What are our chances of getting a Mortgage loan?

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I would be very carefull, as it sounds like year to year you have some very heavy fluctuations in wages. The lender will not like an over 100% swing over those three years and may really question if just the last two years are good enough. The underwriter may not, or may really question why the increases and if it is likely to stay at elevated level.  But they may also be fine with using just last two years.

Even if you got approved at the 75k yearly income, now you are going to be pusing your income to housing of 28%.  Your monthly payments will have to be about $1,750 for just the mortgage (principle and interest).  Forget just the lenders for a moment, and for yourself don't forget taxes and insurance in your escrow account, depending on where you live this could be between 200 to 1000 a month, when knowing if owning is safe for yourself.  For the lenders though 540k at 80% is $432000 loan amount. On a 3% 30 year mortgage P&I will be $1,830 or so a month, and outside of what most lenders would do with your income.  You might need to plan on putting down enough to get the loan amount to about 400k, so this would mean about 26% down, not 20% on the 540k house.

Reply by
Ladybat

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Helpful to 1 out of 1 people

We were hoping not to have to pay more than 20% down but we can do 26% if we have to. We already pay 2,500.00 a month for rent on a house we have been leasing for 4 years and never once late with the rent. The payments on this house would not be much more than that. 

Its no fun having to move every few years and we have a choice now. We can continue as we are or take our money and buy ourselves our own home. 

Thank you for your helpful response. I was wondering about the down payment being enough.

We have to wait till after the first of the year to file our taxes for 2016 to find out if we will be approved we are also putting back enough to pay the extra taxes since we will have to claim more this year. 

This is what it takes to buy a decent home in California.

Well, until after the first of they year I will be waiting and wondering will we get it this time.

Its pure torture for me.

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1 Person Helped

additional information added to top post

My credit score is in the low 800s and my husband's is 740. He is self employed. Owns his own business. I don't work. Our income shown on our taxes will be 75 thousand a year. The house we want is brand new. 540 thousand is its price. We have 20% to put as the down payment. Since we are self employed our taxes are what we have to show for income. Three years worth. Year one 20 thousand, year two 50 thousand and year 3 which will be this year 2016 100 thousand. Best I can tell from all I've read they take the last two years taxes and average them together which I caculate to be an anual encome of 75 thousand.

Our cars are paid off. And we keep our credit card balances paid off each month. No outstanding debts. 

I'd be interested to hear what the experts in here think our chances will be. Going to try and do this after the first of the year after we file our taxes for this year.

I've been waiting my entire life for my own home. Every time we tried before to get one something always happened and we fell through the cracks. Always something got in our way of being able to do it. But now it looks like we are finally close to it. 

Its like someone is dangling a peice of meat in front of me on a string and I am starving and every time I reach for it they pull it out of my reach.

If they approve us I will be 60 years old when I finally get my own home. But if its the home I am dreaming about it was worth the wait. Cause it is a really beautiful house.

So what do you guys think? 

Will it happen or not?

Top Contributor
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I am not sure if you would be approved or not, keep in mind that your overall credit reports are just as important as your scores, so if they are very robust in addition to the decent scores that will be good. Remember the scores here will not be used, it would most likely be a version of FICO scores. So you should check them if you haven't yet. If you are not employed, that is not going to help, so it may make your credit score irrelevant.

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I am not sure if you live in a very expensive area or what, but over a half million is a lot for a home. I am not sure why you would want to put yourself in so much debt especially since you are getting older. Nice homes are nice, but setting yourself up for the possibility of future financial hardship is not. It sounds like you have a nice nest egg saved up (down payment) you would not want to jeopardize losing that money (ex. future you can't make the payments and the house if foreclosed).

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Do as you wish, and I wish you the best, but I don't advise such an expensive house.

Reply by
Ladybat

4 Contributions
1 Person Helped

We live in Calfornia where home prices are some of the highest priced in the Nation. The amount of our monthly Mortgage payment on the home we want is close to the amount of money we now pay for rent. We have been paying this kind of rent for years. Its either continue to pay rent or buy a home. 

We cannot move our business to a different state. Nor do we wish to. It is doing very well here.

My husband has been self employed his entire working life. As a general contractor and now owns another business.

And though I am not employed outside my home myself the buisness is also mine as well and the income from it counted as mine too.

These last 3 tax years are on the new business he began 3 years ago.

We tried to do this last year and passed every thing but the income proof. The mortgage loan officer and our book keeper said we needed to show more income on our taxes for 2016 so we have. Less deductions more income. This is very confusing for a self employed business owner. All we have to show our income are our taxes. The first few years of a new business you are allowed to show quite a few deductions but that does not help when you try to buy a home.

We just do not wish to keep paying the kind of rent we have been paying for years and years when we can more than afford our own home.

Yes it sounds like a lot. But we can make the mortgage payment without breaking a sweat. Even if something horrible happens to this business he still has his contracting liscense to fall back on. 

Its buy a home or keep giving another home owner our money to live in his house all the while knowing that each year at the end of each lease we sign he can decide to sell the house we live in and we are forced to move again and again. 

We could rent an apartment but those are even higher. And the ones in our area are not that nice, have no garages and barely even one parking place and the apartments themselves very tiny. Why should we have to live like that when we can more than afford our own home?

We want our own home. 

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