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Old 02-04-2013, 01:42 AM
2 posts, read 2,054 times
Reputation: 10


Want to buy instead of rent. The prospect of equity is much more appealing to me than renting. Will be fresh out of college, but self employed, and not using my degree. Legitimately make an average of $2200 a month in my area. Planning to relocate in 5 months. While building my client base, I will work part-time (25-30 hours a week) and probably pull in about 900-1000 there a month. I will not start this job until I move, and my future employer has offered to write a letter on my behalf to verity employment since I plan to buy a home before I start working there. I anticipate to have plenty of business (from my self employment) as I relocate. I have pretty good credit - normally ranges from 717-734. I have no proof of past rental or mortgage payments because I lived in a home my parents owned while I was in college. I have about $5000 in savings and plan to save another $5000-$7000 before moving. No major expenses or debt. There is also a chance of a $15,000 gift from my parents that is on the fence. Looking to purchase a house in the 120,000-140,000 range if possible. I will have a roommate. Depending on the home, I expect 400-500 a month in rent. Property taxes in the desired area are around $2000. My biggest worry is the lack of tax returns :/ My business really took off in the last half of 2012. It was much crazier than I expected, and balancing school was really more than I could handle. I wasn't doing a great job of keeping up with income so I did not file for the year. So awful, I know. I have since obtained a sales tax license, and am preparing already for the 2013 tax season. Basically, is it possible for me to get a 30/yr mortgage? If so, rates? Possible approval amount? I don't anticipate to be eligible for FHA because of strict guidelines. Also, factoring with and without the possible $15,000 from my parents.

Thanks so much for your help. Any advice/words of wisdom are greatly appreciated!!
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Old 02-04-2013, 03:12 AM
Location: Southern New Hampshire
9,510 posts, read 16,400,176 times
Reputation: 33083
I have a regular full-time job with a good salary, but I also have some freelance income. In order for the freelance income to count, I had to document at least two years' worth with tax returns, and my bank would then average it. They also would have required a signed lease if I wanted to use income from a potential roommate. (I am renting out my former house and had to have a signed lease for that as part of my financing.)

I'm sure others will chime in, but I think most banks would require at least a couple of years of DOCUMENTED income from self-employment, and you don't have that. On the good side, if the gift from your parents comes through you'll have close to 20% for a down payment (although don't forget closing costs). Still, your monthly income from the job will be pretty low, and you have no documentation of your other income yet ... I would wait a couple of years until you have built up your business AND your savings.
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Old 02-04-2013, 05:56 AM
Location: East of Seattle since 1992, originally from SF Bay Area
39,558 posts, read 70,978,506 times
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I too have gotten mortgages while self employed, and they always required two years of tax returns, business checking account statements, and detailed profit/loss statements that matched the tax return numbers.
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