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xairs33 · Joined: 05 Oct 2009 Posts: 2 1.61 Dollars($)

I'm really wanting to purchase my first home. Here is a little insight of my situation:

-I'm 21, Graduated College in May 2008
-Filed taxes on my own for the first time in 2008.
-Previous years I filed under my parents
-I have technically owned my business since 2006.
-Credit Score 650. It was 708 in August, but I opened a couple of new accounts to try to keep bumping my credit up, not realizing that the more accounts I open, it would actually drop the score since I had not had credit that long Sad

my mistake.
-My 2008 tax returns show a loss. So if I can file in 2009 without a loss and show that I actually made some money......will that be alright? Or will I have to wait until 2010, "show" that I made money for 2 years in a row.

Just looking for some insight on what to do. I really really want to do this. I'm ready for it, I just want to make sure I go in the right direction in the future to make it as easy as possible. Thanks in advance

Aaron,

xairs33 · Joined: 05 Oct 2009 Posts: 2 1.61 Dollars($)

by the way.....my dad has agreed to be a co-signer. BUT....he is also self employed, thus shows a loss. That seems to be affecting things as well.

jameshogg · Posted: Mon Oct 05, 2009 8:34 pm Post subject:

Hi xairs,

It is true that you would require a 2 years of tax returns in order to get a mortgage. As your 2008 tax returns shows a loss, I doubt whether or not lender would be ready to give you a loan. It would be same with your dad. If you can get any other person to cosign for you who has good credit and income, it would be easier for you to qualify for the loan.

Thanks

gmakerley · Posted: Tue Oct 06, 2009 8:17 am Post subject:

self employment must be 2 years in duration, and the claimed income must be supported by income tax returns. as james noted, with your tax returns showing a loss, you'll not qualify. period. your dad's self employment is no different, despite his presumably being self employed for a longer period of time.

with another family member as cosigner - one who has wage income, of course - you may be able to wangle a deal on an fha product. otherwise, you'll need to begin to show income on your tax returns, and be able to provide a 2-year history with that income as well.

jveenstra · Posted: Tue Oct 06, 2009 8:59 am Post subject: Self employed

There are regional stated income programs for self employed.

You must be self employed 2+ years and you "may" have been. I say "may" have been because it will take something to verify you have been self employed 2+ years---a CPA that states such in a letter (may be difficult because you have only filed tax return in 2008) or a copy of a business license dated 2+ yeasr ago (may not be possible if a license is not required for your business.)
Down payment is typically 30% range.

If you have a 30% down payment, note in which state you will be purchasing and you may get some better help on this site.
If you do not have a sizeable down payment, there are probably not any stated income mortgage programs available, and, as noted above you will need to document income and that involves averaging the income on most recent two years tax returns.

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Self Employed. Problems getting pre-approved. Need some guidance