I am looking to get a mortgage on a property 110k-135k I currently have around 630 credit score and pay the mortgage on the house i want to purchase now.... Family owned property... I am self employed grossing over almost 50K but as you know with all the self employed deductions I claim almost nothing on my tax return..... litterly almost nothing... How do I go about getting a mortgage .. car loans have never been an issue I have 2 cars 12k for one 18k for another... but they need paystubbs not tax returns.... SO this is probably a difficult situation but You guys have been a big help in the past. THANKS!!
This is a very difficult situation as those who are self-employed obviously want to minimize taxes as much as possible. The problem is when an underwriter looks at your application and sees little to no W2 salary or very little taxable income, getting approved for a loan can be basically impossible these days. My experience has been that most underwriters are fairly clueless when it comes to how small businesses work. Your best bet is to find a really good broker that works with a lot of self-employed clients and knows how to go to bat for you with the right lenders/underwriters. Focus on getting your FICO scores as high as possible too. Ideally, you want to be sitting in the 700s before moving forward. How is your business structured? An LLC, S-corp, or sole proprietorship?
Self employed borrowers in past where able to used stated income loans. Lenders have not offered stated income loans in a long time. I am not sure why they haven't started offering these loans for self employed borrowers. That is who they were originally design for but then everyone started using them to purchase homes that you couldn't really afford. Working on improving your credit score and talking to a mortgage broker is also the best advise I can give as well. Lenders are always coming out with new loan programs, there might be something out there to help the small business owner. Thanks! Heather with BoostMyScore.NET
I currently run a sole Prop. As I said grossing almost 50K... but net is low.. I am amidst of trying to boost my credit... I was was recently put on as an authorized user on a card with around 35+ years of credit history since '77, but when I was added they only asked for my full name and no social or nothing... Would there be any possible way that would get reported on my credit score? I think that would show a HUGE improvement on my score, being that is probably the worst part of my credit history how short it is??
It depends on which bank the credit card is from. Some banks require a social security number to report to the bureaus and others just need the cardholders billing address on your credit report of the authorized user account to report. Which bank is the authorized user account from? Heather with BoostMyScore.NET
I believe its a retail card.. Jc pennies etc... and we know for a fact they report to her credit.....
I am unsure.. As the house That I live in she has owned for 20+ years( I jsut pay the mortgage).... and she just recently moved 3 years ago.... So Not so sure on that one.. would that make a difference. Will update when I get a hold of her.
The only way I know how to get address for the JC Penny's card on your credit report is update your address with all three credit bureaus, or if you know someone that can run a "hard" pull on your credit using the address for the JC Penny's card that would work. Thanks! Heather with BoostMyScore.NET
If the addresses on your credit reports are different and you didn't provide a SSN in order to be added as an AU, then I doubt the credit card will show up on your credit reports. Do you have any credit cards in your own name at the moment?
yes I have a -capital 1 cash rewards card $500 -Paypal Smart connect line of credit $100 -First premier(UGHH) $350 -Ge line of credit to lumber liquidators $2,000 Longest open account on any of these is maybe 2 years and a few months. None have ever been late/delinquent or anything negative.
What's your current credit utilization? If you can get it under 10%, your scores should see a marked improvement. I'm guessing that since your credit limits are rather low that you might have a high credit utilization ratio holding your FICO scores back in the 600 range.
My utilization is usually 0... My paypal and lumber liquid.. are ALWAYS 0 I do not use anymore.. my capitol 1 is paid off RIGHT away if i ever use it.. rarely due.. I just pay the stupid 7$ monthly fee for the first premier card every month and don't use it either.... so its never higher than 10%
OK, then utilization doesn't sound like a problem for you. You credit history is obviously short, which means that you don't have a lot of positive payment history on your credit reports either. Getting yourself added as an AU on a credit card in good standing with many years of history should be just what you need to see some improvement. Do you have any other options beyond the JC Penny card? Also, sole props can make the whole mortgage approval process even more difficult because you don't even pay yourself a salary like you would within an S-corp. You can convince some underwriters to add back in certain business expenses that might be considered personal to increase the "income" number they use, but getting your debt-to-income ratio where it needs to be might prove difficult. What kind of down payment are you planning on making? You should be prepared to at least put down 20%.
