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Old 10-07-2014, 12:06 PM
 
2 posts, read 3,063 times
Reputation: 10

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Okay here is the scenario... I myself don't quite have the credit score requirements to obtain a mortgage.. I do however have the income. My fiancee' on the other hand has recently been approved from quicken loans with her scores, but her income disqualifies her because she doesn't have a "verifiable" type of income. She is a cosmetologist, therefore she is classified as self employed. She doesn't get a paycheck, but she is paid by clients as they come in. She is fairly new to the business and hasn't made really enough to file any type of taxes yet, so retrieving returns for last year isn't an option. She did have tax returns from a salon that paid hourly 2 years ago, but not for last year or this year (on her own now).

So here is my question: Is she able to obtain a mortgage even though her income cannot be verified right now through the conventional ways? Would she be able to have a co-signer or non occupant co-borrower that does have verifiable income? if so where would we look and how would we go about doing this? I know it doesn't matter since I won't be on the loan, but I will be contributing to the payments with my income since I will be living there also.(for what it's worth I make 50k annually) We live in Ohio so if anyone can provide insight on who to contact to get her a mortgage, or steps to take to obtain one that would be greatly appreciated. Thanks

Ben
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Old 10-07-2014, 02:12 PM
 
Location: Bloomington IN
8,590 posts, read 12,290,430 times
Reputation: 24248
As a self-employed person that has yet to file any taxes and in business for herself for scuh a short time, she will probably not be eligible for a mortgage until she can show she has income.

Any co-signer/co-borrower will also need to qualify for the mortgage.

The best step to take is to clean up your own credit scores, and wait until she has verifiable income.

Think about what you are asking. Would you lend tens of thousands (maybe hundreds) of dollars to someone with no history of employment as evidenced by tax returns?
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Old 10-08-2014, 06:05 AM
 
Location: Port Charlotte
3,930 posts, read 6,421,760 times
Reputation: 3457
Check out such sites as debtorboard that give letters, etc and guides about cleaning up your credit. Clean up your credit. You are not married and I would be VERY cautious (as in DON'T) about buying a home with a fiancée. Many a slip between 'will you' and 'I do'.

Get copies from all three credit reporting agencies, and challenge each and every negative item, even if you believe they are valid. The burden is on the reporting entity to respond and defend their claim. Also, if you have a bad debt, there are statutory limits on claims especially when the bad debt is sold to third-party entities. In some states, third-party entities that buy the bad debt do not have a valid recoverable debt on non-secured personal debt (credit cards).

Get informed about the national and state laws, and become proactive in cleaning up your credit. You should be able to get your credit up in less than a year. At the same time, save as much as you can.

If a company wants a payoff of a debt, negotiate the lowest possible payoff, and get an agreement that the company will show the debt paid in full. That will help as well. Also, if you have one of those little medical debts on your credit report (no notice other than when the collection company calls), the reporting companies are no longer considering these against your credit and these can be challenged as well.

Focus on this and you should be able to buy by next spring.
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Old 10-08-2014, 03:36 PM
 
Location: Austin
7,244 posts, read 21,757,022 times
Reputation: 10014
Lenders use the credit score of the higher income earner because the higher income is the one that more secures the debt. Her higher scores do nothing for you as they can't use them with no tax returns to show any income. You need to get a co-signer, not her, if you want to go that route.
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Old 10-11-2014, 06:41 AM
 
Location: Southern California
4,453 posts, read 6,782,390 times
Reputation: 2238
Quote:
Originally Posted by tylermc1984 View Post
My fiancee' on the other hand has recently been approved from quicken loans with her scores, but her income disqualifies her because she doesn't have a "verifiable" type of income.

Ben
Then she was never approved by quicken. I love that spin, I might start using it. You are approved, you just don't make enough money, have enough assets, or high enough credit score. When taking the coborrower route, the co-borrower will have to qualify on all of her debt too since she doesn't want to file taxes for her income.


Quote:
Originally Posted by FalconheadWest View Post
Lenders use the credit score of the higher income earner because the higher income is the one that more secures the debt.
That is interesting.
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Old 10-11-2014, 01:16 PM
 
Location: Kailua Kona, HI
3,199 posts, read 13,371,483 times
Reputation: 3421
1. Buy what you can afford on your own if you are not married. Even buying with a family member can be dicey but much more so for 2 unmarried persons. If you are not committed to the relationship don't go into business with a person!

2. She needs to be keeping track of all income, and claiming it and filing her tax return for 3 years before she will have much chance of obtaining a mortgage. People that work in industries where cash payments are common often fall into the trap of not declaring every dollar they collect. But, when you want to qualify for a loan you must prove all your income, every bank deposit, etc.

3. Take steps to clean up your credit.
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Old 10-13-2014, 08:55 AM
 
2,294 posts, read 2,774,076 times
Reputation: 3852
I don't know of anyone who's ever been suddenly surprised to find out that despite what they though, they can get a mortgage. I've known plenty of people who have had their suspicions confirmed that because of their bad financial situation, they can't get a mortgage.

If you don't think you're able to get a mortgage because of bad credit on one end and lack of income on the other, that's probably the case. Any games played to try and change that are likely to come back to hurt you down the road.

The only solution you should be looking into at this point is fixing your credit score and documenting her income going forward. Usually self employed would want to see about 2 years worth of returns, but if you're not making enough to file taxes, you're not making enough for a mortgage.
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Old 10-13-2014, 01:45 PM
 
Location: Southern California
4,453 posts, read 6,782,390 times
Reputation: 2238
Quote:
Originally Posted by Jeo123 View Post
I don't know of anyone who's ever been suddenly surprised to find out that despite what they though, they can get a mortgage. I've known plenty of people who have had their suspicions confirmed that because of their bad financial situation, they can't get a mortgage.
I know self employed people that have been told over the phone that they couldn't get a loan. They have been able to get a mortgage working with the right type of lender. Some lenders are lazy. It is easier to tell someone they don't qualify than look at all of their documentation.
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