First time homebuyer with income question

[Anonymous]

been using myfico and reading the forums for years but this is my first post.  I'll try to give a quick summary.  want to buy a house soon

me:  in my late 20s.  credit scores above 700.  around $6k in cc debt that I plan on paying off in the next few weeks.  no other debt at all.  been in sales since 2007.  had a low-paying sales job that I took for experience during fall of 2007.  issues began at work in late 2009 and I started looking for another job.  found one that I thought I had wrapped up and ended up walking out on the other job one afternoon last May.  of course the new job that I thought I had fell through.  had another opportunity come up and got on board with a great company that hired me in September.  started in November.   past income is low.  made around 28K in 2009 and 22K in 2008.  only made around 19K last year because I was out of work from May-November.  been with the new company for 4 months and have made nearly 17K in that time and close to 9K in the first two months of 2011.  I have a $24k/year salary and a very steady stream of accounts I inherited.  I expect to make $55K-60K this year, if not more. 

wife:  good income of around 80k per year.  her credit is wrecked due to a family member opening cards/loans in her name.  we're talking 520 scores, $15k worth of cc, $40k worth of loans with late pays everywhere.  its going to be a huge undertaking to get her score up

basically I have the credit but not the past income.  the wife has the past income but not the credit.  we're in the house we want to buy and have been in it for 18 months.  purchase price would be around $155,000 and we've been paying $1200/month for the last 18 months.  spoke with a loan officer yesterday and he thought he could get it to fit going on just my guaranteed salary but he called back a few hours later saying he couldnt. 

assuming I pay the cc's off in the next few weeks (which will leave me with zero debt), what income would I need to qualify?  and what purchase price would only a 24k salary qualify for? 

[mauve]

Your wife might want to consider looking into filing paperwork for the identity theft. 

[Anonymous]

as much as I would like her to file ID theft charges she would never do it.  we're talking about a parent here

[mauve]

http://www.bankrate.com/calculators/mortgages/new-house-calculator.aspx

It's going to depend on a lot of factors, like property taxes and down payment.  I'm sorry she can't be reasoned with.  If you want to purchase a house without her scores and without fixing her credit, it sounds like you're going to have some time to wait.  I hope she doesn't get sued over debt that isn't really hers in the meantime.

[Anonymous]

we are working on getting hers fixed.  in a basic summary my wife thought her parents were putting her through college with cash when in fact her mother was opening accounts in my wife's name to put her through college.  her mom has been paying them, she has just had some issues with being late on a few of them in the past.  no collections or anything.   just a massive amount of debt

property taxes are dirt cheap here.  I think taxes on the house last year were around $600.  insurance will probably be around $1000/year.  can I pay those myself upfront so it wouldn't be included in the debt ratio?  I can go 5% on the down payment right now and could probably go 10% in another month. 

[mauve]

I'm no expert, but I would imagine that the answer is that you need to wait until you have been at your job for 2 years, given your prior unemployment.  I'd also imagine you'll need to be saving up a good down payment, and that will bring down your DTI just because the loan would be for a smaller amount.  Working on her credit is key - student loans don't tend to be particularly forgiving of lates.  Paying down the CC debt should boost her score somewhat, but I don't know how much good that will do, especially if she can't guarantee that there won't be any more lates. 

[Anonymous]

I was wondering about the two year deal because my job with this new company is in the same field as the one I worked in from 2007-2010.  I left my last job because of issues with pay (specifically I wasn't getting paid on new accounts) and because I thought I had another job lined up.  when it fell through I found out about another position with a different company and landed that job.  so yes I had a 5 or 6 month gap but it was because I was bettering my career.  I will make twice as much this year than any year with my previous job

[Anonymous]

So you are renting from the seller? Would he be willing to do a contract for deed? If you could do a two year contract, that would give you enough time to build up your income history and/or clear up dw's credit. Depending on the housing market in your area, your landlord might jump on it.

[Anonymous]

yeah, renting from the seller.  here's where the situation gets even more interesting.  its a guy I'm friends with.  he was getting married two summers ago right around the same time I was getting married.  he and his wife were wanting to buy his parents house and move but couldn't until his house sold.  his house had been on the market for awhile with no offers.  at the time neither my wife or myself had enough time at our jobs (we're both in sales).  I was living in a house that belonged to my parents.  it had been for sale for years but finally sold so I had to find a place to go.  the owner of the house and I came up with a deal where I would move in, pay his mortgage and then buy it when I had enough years of employment in sales.  I was planning on that being last year but, like I said, I had to get out of my job and find something else.  this june will be 2 years and he is wanting out from under this house. 

[mauve]

Sounds like a situation where he might need to be counting your rent as income so he can do what he needs to do.  I'm not sure what to tell you about qualifying for a mortgage currently.