i dont show much income. can i get a loan?

svasovski · Joined: 05 Feb 2010 Posts: 3

ok here is the deal. i show that i make 5000 dollars a year but i make much more. my girlfriend that i live with also gets paid cash and shows no more than i do. but we really make much more. we have been renting a two bedroom apartment for a year now and i really want to get in a house but i dont know what to do since i do not show any income. my credit is average to below average. i have been doing good with it the last year or two. no late payments at all. about 1000 in collections for med bills. i pay 735 dollars on rent. and about 650 between the bills and truck pament a month. so i can easily handle a morgage payment of around 100,000 to 120,000 dollars wich is all i would need for the houses we are looking at. can anyone please help me out and let me know if its possible to get a mortgage or what i can do to be able to soon. thank you.

David · Joined: 19 May 2004 Posts: 754 Location: Atlanta, GA

It is not likely in this environment. You will surely have to make a very significant down payment (more than 50%) with no income. That said, depending on the state, you may be able to use other means besides your tax returns to prove income, and that would be an area you should focus on (how to prove income) if you want to stand a chance of getting approved for a mortgage.

svasovski · Joined: 05 Feb 2010 Posts: 3

thanks david. i live in michigan. any means to show income here that you know of?

JPowell · Joined: 20 Jan 2010 Posts: 103 Location: PA

I'm just curious, is there a reason that you don't claim all of your income? It sounds like it could be risky not to...

I can't believe you got an apartment while only claiming $10k between the two of you. I've always heard from apartments that you need to show 2.5x the rental amount to get in.

svasovski · Joined: 05 Feb 2010 Posts: 3

i work for a family business. thats just how my dad does it.

TimtheMortgageGuy · Joined: 16 Jan 2008 Posts: 96 Location: Rosemount, MN

svasovski wrote: i work for a family business. thats just how my dad does it.

I would say your only shot would be to try to get a loan through your local bank where your family business banks. Your rate will be higher and you will not get a 30 yr. fixed rate, but it may get you into a house.

For the long term you should get on an actual payroll and start paying legitamate taxes on what you are really earning.

MrPink1130 · Joined: 11 Feb 2010 Posts: 17

BY the sound of it, you're going to run into a DTI problem anywhere you go

if between you and girlfriend you both make $10k a year, that's 833 a month

So, you'll be approved for a house payment of about $333.20, that is PITI

EricJ · Joined: 09 Jan 2009 Posts: 321 Location: New Jersey

Owning a home is not for everyone. IN this case, I would recommend renting until the income is much higher.

nixadm · Joined: 27 Sep 2005 Posts: 5

EricJ wrote: Owning a home is not for everyone. IN this case, I would recommend renting until the income is much higher.

I think he makes a lot more than 5k a year, its just that a lot of small businesses find deductions and bring their "profit" down. There is a lot of legit business deductions out there. But its not so great when you try to go get a loan.