Looking for a lender (unique situation)...

DLC11 · Joined: 26 Jan 2008 Posts: 2

State:Indiana
Loan amount: $135,000-145,000
Property Type: Single-Family
FICO Score:671,660 and 690
Currently renting an apartment for $650 a month. Been here four years. I am a first time buyer.

I am in a very awkward situation trying to get a loan because I am a professional poker player. I have been playing poker professionally for about 14 months now. Last year I made right around 50K, which I will be filing taxes on in the next couple of months. I am married, but my wife is going to school full-time, so she can't really help with any additional income. I am not really sure what I can do. I would like to get in a situation where I wouldn't have to put any money down, but I am not sure if that is possible.

I have talked to some people and most think that going with a no documentation loan is my best course of action. I will have prove of my income for last year, but that is all.

If any can be of any help it would be greatly appreciated. My wife and I would love to be able to purchase a home.

If I need to post any more details please let me know. My e-mail address is dlc11@insightbb.com.

Thanks,
Derrick

Haplo · Joined: 20 Jan 2005 Posts: 2406 Location: Springfield, IL

You may be able to do a no-documentation loan, but you won't likely be able to get it with no money down, and the rate won't exactly be what you see walking down the street. High-risk loans are like a plague these days that nobody wants to jump in on.

It might be a bit better for you to wait another 10 months until you've got 2 years under your belt (keep in mind you have to be able to document the 2 years, and I'm not sure how you'd do that other than taxes) and go with a standard conventional loan.

Either that, or if there is someone that can co-sign with you that would have enough income to support the payment themselves. If it's a family member, they can be a non-occupant co-borrower with as little as 3% invested in the transaction (via FHA).

DLC11 · Joined: 26 Jan 2008 Posts: 2

Thank you for the response, Haplo.

I am pretty new to this stuff, so when you say " they can be a non-occupant co-borrower with as little as 3% invested in the transaction (via FHA)." What exactly does this mean?

Also, are there any lenders out there that would take only one year of documented self-employment? If there are, how much different would my rate be as opposed to waiting?

Haplo · Joined: 20 Jan 2005 Posts: 2406 Location: Springfield, IL

To answer the first question, that means you can have a family member on the loan with you, but doesn't live in the home with you. FHA requires a 3% investment in the transaction, and this can come from your own funds, the family member's, another family member as a gift (who's not on the loan) or a non-profit.

On the 1 year side of things, the investors require 2 years. About the only way you would find someone willing to invest without those 2 years would be if you went to a local bank that would use their own money, and therefore make their own rules. Most of these banks require 20% down (at least) and are on 3 or 5 year balloons. (A balloon is a loan that comes due at the end of that time period. You would have to refinance the loan or pay it off at the end.) Even they will likely be reluctant to lend money in this exact type of situation.

Now, if you can show a history in the same line of work that is > 2 years, then you may have a chance with the tax return.

Depending on what part of IN you'll be living in, and their taxes, you may see your house payment go up fairly dramatically. A loan at $135,000 is going to run you around $800 (assuming 6%, your mileage may vary) and adding in taxes and insurance (and potentially PMI) could get you to $1000-$1100 very easily. Keep this in mind, as that's almost twice your payment now.

Hope that helps!