Looking for REAL helpful advice....

Olivia3310 · Joined: 03 Jul 2007 Posts: 4

I am currently renting a condo in The Illinois Suburbs and my lease Is up In October. My husband and I have had problems with our credit (husbands bad enough it would take years to fix) but I have worked my Fico score up from 554 to 615 and I am still working on getting it up there. Between my fulltime job and a small Internet business my husband helps me run we gross over 100k and I REALLY want to buy a home before my lease Is up. Nothing crazy to start, In fact a nice town home will do. What I am worried about Is do I have to have my husband go through the process with me for the mortgage because I am afraid his bad credit will definitely hurt my chances. Also, what are the chances of me getting a loan this year with say a fico score of 650 - 670 with $5000.00 down on say a $225000. town home? Am I dreaming or can this be done? Thank you In advance for any help or Info. Have a wonderful 4th of July!

Haplo · Joined: 20 Jan 2005 Posts: 2422 Location: Springfield, IL

A lot depends on the actual details of 1) your business (How long have you had it? What do you show for income on your tax returns?) 2) the credit history you have over the last couple of years 3) where you are looking to buy.

$5,000 is shy of 5%, so you're looking at a loan that either has 100% financing, or close to it. If you're looking in Cook county or the immediate area, you may be able to do an FHA loan (county limits are a touch higher there) and that might work for you. (Good rates, lower PMI, Fixed 30, etc.) If your income on paper is significantly lower, it could change the scenario pretty drastically.

Your husband wouldn't necessarily have to be on the loan, if you can show that you are able to support the payment yourself via your own income and how much your debts are.

Another thing to consider are the closing costs. Down state here, our closing costs only run about $1500. In Chicagoland they're going to be higher, although considerably lower than most areas in the country. It's just something you want to keep in mind.

Olivia3310 · Joined: 03 Jul 2007 Posts: 4

My business Is In Its second year. What exactly do you mean by "What do you show for income on your tax returns?"
My credit history the last year or so has been great! I am just about ready to pay off a car loan the only other thing I am doing right now Is paying off delinquents on my credit report (less then $2000) but that should be done by summers end that is why I can see my fico score going much higher. I am looking to buy In Schaumburg, Illinois

Haplo · Joined: 20 Jan 2005 Posts: 2422 Location: Springfield, IL

With it being in it's second year, and a secondary income, it may be outside of what they will allow for. If you have a history and you receive more income from the business you may want this to be listed as your primary, it could still be difficult, but possible if you can show you've done this before through perhaps another employer.

As far as my question, what do your tax returns show for the amount you made for your business income. On the lending side of things, we're looking at how much you actually make on paper. I.e. all the deductions you take out make life more difficult on our side of the table. You may show in your pocket that you bring home $60,000 / yr from this business. If you wrote off $45,000 however, we're only going to count the remaining $15,000 (plus depreciation.)

If I remember correctly it should show on line 12 of your tax return how much your business income was, and then check your schedule C for how much you show in depreciation and that's the figure we'd likely use.

Olivia3310 · Joined: 03 Jul 2007 Posts: 4

Between my job and business I cleared 86k, but I know I will clear over 100k this year. I actually make more with my business then my actual job but I need the job for health insurance.

Olivia3310 · Joined: 03 Jul 2007 Posts: 4

Has anyone had a similar situation as mine and can shed some light?

neverchange · Joined: 12 Jul 2007 Posts: 9

i was just reading the responses and wanted to say thank you for all of the useful advice..