Do I Qualify??? and other concerns!!!

[Godoi25]

1. Mortgage Credit Scores

As of 01/03 EQ660 TU703 EX678

FICO8 scores 01/03 EQ676 TU729 EX711

1. Credit Negatives

None

1. Gross Income

Bi-weekly $4200. This is paid by my own business as W2 salary. Business is a little over 2 years now.

1. Monthly debt payments

Vehicle #1 $600 (for business use but in my name, all payments come out of business account)

Vehicle #2 $340 (for business use but in my name, all payments come out of business account)

Vehicle #3 $250 (girlfriends car, cosigned for her)

Vehicle #4 $500 (my personal)

Credit card #1 $75 minimum pmt ($6600 balance on $8200 limit 0% int)

Credit card #2 $75 minimum pmt ($3600 balance on $5000 limit 0% int)

Personal secured loan $101 pmt ($180 balance of $1000 original)

Child Support $530

Total: $2,370 but actually only $1180 that I am responsible for.

1. I do not have significant assets or reserves, in the past year I worked on paying debt down to what it is now. I believe I could come up with at least $10k for down payment if comes down to it but I will be looking first for $0 down with Navy federal.

1. Location: single family house in Florida. From $190,000 to $250,000.

1. Occupancy: primary residence, my girlfriend and I will be living in it. Her income is around $38,000. I will be the only applicant because she has a lot of baddies.

Now, my concerns and things I am working on:

1-Will my income or source of income be a problem? My gross income on 2016 tax return was $55,000 and on 2017 tax return will be over $100,000. Will it be a problem that I am my own employer?

2- DTI: The $250 from my girlfriend’s car payment can be eliminated because she got approved for refinance on her own 3 months ago but we didn’t take it because it was same high interest rate she has now.

My biggest concern is with vehicles 1 and 2. (I am sorry if this sound really stupid) Is there a way they could be overlooked and not counted on my DTI calculation? Maybe through underwriter? Vehicle 1 has an outstanding balance of $22000/$36000 and #2 $8000/$18000, both these loans were created over 2 years ago when business didn’t have any credit and every payment since has come out of business account.  I don’t know where to go to try and get them refinanced under business name without reporting to my personal. Last week I checked lending club website for a small business loan and it was pre-approved for $30,000 which would cover paying them off, but interest was way too high and I would still need to give PG.

3- What should my next step be? I have another 6 months on my current apt lease. Should I seat down with a LO now and discuss my options? Is there a way around the two business vehicles to not count on my DTI or I need to take care of that first before anything?

My current overall UTL on all ccs is 23% with all at zero but the 2 with 0% int above. I want to try for a cli with NFCU (current $8200 limit for almost 5 months) to further reduce utl, is that a good idea or I should avoid the risk of another inquire?

Thank you in advance,

[Anonymous]

Your card utilization is very high, and id be a bit concerned about your DTI with four cars (business or not, they are in your name as your debt)

[Anonymous]

Definitely meet with a loan officer and go over your reports. They can help you make a plan for what you need to do. I can’t help but think that there is some type of negative on your report holding your scores down. They are very similar to mine and I have all kinds of late payments from about 5 years ago. As already mentioned, your individual card utilization may be cause for concern and is certainly holding your scores down. I can’t imagine that your income would be an issue, but if you can do something to put the vehicles in the name of your business that will certainly help your DTI.

[JVille]

From a Lenders perspective you are Self Employed makes no difference that you W2 yourself. Be prepared to produce 2 yrs of both personal and business returns. If your 2017 year is significantly better I would hussle and do those returns as fast as possible. In fact since your business is pretty new you may be dead in the water until you are able to produce returns.

[Godoi25]

Exactly my thoughts. I will have my girlfriends removed by her refinancing on her own. Not sure about the other two used for business but I will have to figure something out.

[Godoi25]

Thanks for the response, I went to look back on credit reports and there it was, 1 collection reporting on Equifax. I thought this had been long gone since it stoped showing on creditkarma but there it is on the reports I pulled from here yesterday. It is a mediacon showing as paid from 2012. That is definetly what is holding equifax significantly lower than others.

Other factors are 25 inquires in the last year on equifax (only 3 on TU and 6 on EX), $70000 total debt and 21%utl on revolving.

I will certainly work on getting the vehicles under the business.   

[Godoi25]

Thank you for the response, I will have 2 returns in a few months. The lenders perspective is by far my biggest concern. Does it matter it is a partnership 50/50 and my partner and I receive the same salary?

[JVille]

No. Your Business returns will make that clear. Are you running those cars ( the ones with the loans) thru your Tax Returns & Business Books. If the debts is carried on the financials, depreciation on these vehicles running thru your returns and car show cancelled checks written by the Business for pmts (or from business acct) you may get some relief. The lender can’t hit you twice for the same debt if it’s already reflected in your Business returns. Obviously this is a complication that should be corrected IF possible. Just some thoughts....

[Godoi25]

Yes they are included in the business returns. Yall think its worth seating down with LO before to explain the situation and see what he wants me to do, or try to fix vehicle issue before and wait for 2017 tax returns to be in hand?