Quote:
Originally posted by DrewKole
You'll be treated like a self employed person, regardless of the business you're in... unless your tax returns say "Im a fucking pornographer" it doesn't matter.
That being said, you need to show atleast the last 2 years of your tax returns... if you were employed at a day job within the 2 years, that job will need to be verified as well.
The main thing you need to be concerned with is, having the cash for a downpayment ofcourse, and your credit rating...
The higher your credit, the lesser the perceived risk by the bank, and the lower downpayment requirements and interest rate. If you have bad credit, expect to have to put down more and/or have a much higher interest rate.
Also, unless you put down 20% down, you'll have to pay mortgage insurance.
With anything related to financing, be concerned with your credit rating and your debt to income ratio... Being self employed sometimes sucks, you need to go stated income in the event you can't prove you make what you make... You have to have real high credit rating, and money in the bank.
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Wow, if I didn't know better, I'd say you know what you are talking about. Could it be? Could DrewCole (sic) actually NOT be a complete moron?
Just kidding. Actually, everything Drew said is correct, but I have 2 additions to make:
1. You can get around mortgage insurance with creative financing. You can get a primary loan for 80% of the cost of the home, a second loan (shorter term, higher interest rate) for 15%, and then only put down 5%. Yes, you are paying a higher rate on the second loan, but if you figure out how much you are saving on the mortgage insurance, your monthly payment will likely be very close AND you will actually be putting money towards your house. It's a pretty sweet loophole.
2. When they look at your last 2 years of tax returns, they are really only looking at the money earned from your current job. ie, if you had a day job AND did self-employment stuff and then you quit your day job and went full time self-employed recently, all the money you used to make from your day job will be ignored. They will want a current P&L statement too.... Not a big deal if you are making nice bank from your delf employment, but still something to be aware of.