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Frequent Contributor
creditwatcher2012
Posts: 455
Registered: ‎06-27-2012

Help will be applying for a mortgage soon

Hello, I am fiarly new to this form and if possible would like some adivice as to what I should do for you the experts.

 

I am a self employed General Contractor, I own my own business, I am filing income tax this year for alow 90000 with no deduction(except the ones everybody gets which I think amounts to about 16k), so after starting it on turbo tax I will have to pay 26k in taxes(I am ok with that) my question is, is I havent filed in about 3 years due to the economy and being out of work, and in the past when I did file I had alot of deduction..... so When I file this year for 90k and next year for 90k will I qualify for a mortage.

 

I am looking to purchage a 500k-600k house if at all possible, or if not I will look in the 350.00-400k range.  Based on your experience do you think I will qualify for this amount of mortage and btw I am a first time home buyer (own another home but never obtained a mortgage)

 

My plan is to take a home equity out on my office(other home) to come up with the down payment on my home.

 

Do you have any suggestions when I file my income tax?

 

Also my credit is a 680transunion, and substantially lower on the other two(80+ inquires) hoping they will fall off by the time I buy my house.

 

Credit Cards

Chase Freedom 4k/4k

Chase BP 1700/1650

barclay apple fiancing 1k/950

Merrick Bank 1k/1k

Capital One No Hassle Rewards 500/500

Capital One Platinum 500/500

Credit One Bank 300/200

Target Red Card 200/0

Orchard Bank 400/400

Installment Loan 5k/ 205.00 a month 

 

(credit line, utilization)

 

I have VERRY HIGH utilization now because of christmas shopping etc, and took the loan out to come up with the additional money to buy my son a Rolex for his hs graduation

 

Anyfeedback will help,

 

Thanks

Frequent Contributor
creditwatcher2012
Posts: 455
Registered: ‎06-27-2012

Re: Help will be applying for a mortgage soon

I should also add In March I am planning on buying a new car price 52k financing about 40k

Moderator Emeritus
llecs
Posts: 32,880
Registered: ‎08-04-2007

Re: Help will be applying for a mortgage soon

[ Edited ]

Even if no tax was owed, you still will need to file for previous years. I'd do that now.

 

When your lender looks at your income, they'll look at your net income only on your Sch. C (assuming you are a 1099er vs. paying yourself a paycheck) instead of factoring in the gross. Be careful of how you file. Your lender will also look at the prev. year at least.

 

Not sure on the DTI. Seems like it could be too high on the $500k range.

 

Pay off the balances ASAP.

 

Opt out.

 

ETA...I'd delay the car purchase until after the mortgage closing.

Frequent Contributor
creditwatcher2012
Posts: 455
Registered: ‎06-27-2012

Re: Help will be applying for a mortgage soon

thanks so do I need quarterly profit and loss statements?

Frequent Contributor
creditwatcher2012
Posts: 455
Registered: ‎06-27-2012

Re: Help will be applying for a mortgage soon

also why should i delay the car purchase?

Moderator Emeritus
llecs
Posts: 32,880
Registered: ‎08-04-2007

Re: Help will be applying for a mortgage soon


creditwatcher2012 wrote:

thanks so do I need quarterly profit and loss statements?


I'm a biz owner as well and applied for and received a loan 12/2010 and 1/2011 respectively. My lender asked for a current balance sheet and P&L annual statements for the prev. 2 years (2009 and 2010) and asked for an estimated P&L for 2011. I had shown a large loss for 2009 on my Sch. C but large gains for 2010 and they wanted a forecast of where things were going with an explanation of the turnaround.

Moderator Emeritus
llecs
Posts: 32,880
Registered: ‎08-04-2007

Re: Help will be applying for a mortgage soon


creditwatcher2012 wrote:

also why should i delay the car purchase?


The main reason is that it'll cut into your DTI if you finance the car and that'll for sure lower your purchasing power. Depending on when you buy, your FICO score could still see some damage when you apply for the mortgage. IME, new accounts dinged me for up to a year.

 

 

Regular Contributor
SantaMar
Posts: 117
Registered: ‎03-04-2012

Re: Help will be applying for a mortgage soon

With all due respect bud 500k might be too much to balance. I know you have high utilization but even with all you cc paid off you are willing to take out a high note. With a purchase price of 500k at 5 percent down your note will be 475k plus an equity line?!? One reason they want two years of tax returns is to see job stability (among other things). You said yourself that the past two yeas were rough for you correct?! Idk. Seems like you should be in the 250-300 category. My personal opinion.
Frequent Contributor
creditwatcher2012
Posts: 455
Registered: ‎06-27-2012

Re: Help will be applying for a mortgage soon

Thanks For the Reply,

 

I was planing to put approx. 20% down, what would you recomend, I will have all my cc's paid off definately by march when I purchase a new vehical, but anothet question, making 90k a year, and financing a car @610/month what do you think they would approve me on for a mortgage?

Valued Contributor
MovingForward_2012
Posts: 3,406
Registered: ‎12-19-2012

Re: Help will be applying for a mortgage soon

I remember you. You were recently denied numerous of times for a auto loan and posted about it on the auto loan thread. Your 75 inquires you acquired from June to now trying to buy a car won't fall off for two years. You stated the score the dealer pulled was 580. There is no way you are getting an Infiniti JX in March for $610 a month and then a mortgage shortly after that. $610 a month for a 52K car plus $10K down that you stated you would put down is the payment for someone with A+++ credit and even then $610 is still a little low. Your 580 score will cost about a $1,000 car payment for the Infiniti JX. Plus you stated you had 21 late payments on your auto loan. There is no way you will qualify for a 500-600K mortgage with that score, your income, and your DTI. Mortgages are harder to get approved for than an auto loan. 90K a year can't buy a 500-600K home and a 52K Infiniti JX. You are at least 2 years away from both a car loan and the mortgage. Try it if you like but you will be sadly disappointed. Like I said before on the other thread, you need to spend the next two years gardening otherwise I could see you filing bankruptcy in a few years if you can pull a fast one on the lender. Right now you are not properly managing your finances and the mortgage lender will see that just like the multiple dealerships you applied at saw it which is why you got denied over and over again. Not sure who you are trying to fool with all of this but if you only read what you want to hear, your going to be in bad shape. I encourage you to read our advice and apply it instead of blowing it off. My two cents.
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