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Hello, I am 23 years old and have been improving my credit for 2 years now - kind of at a stand point until all of my collections fall off (most are still a few years away and there is 7 total - all of them have now been paid after an unsuccessful year of attempting to have them removed from my report altogether.
I have been renting for a while now and have been working from home (my room is my office which is not ideal anymore because I work a lot and oftentimes the bedroom light will be on through the night while my fiance is sleeping).
I looked into renting a larger house, but am not liking the idea of throwing so much money away, so I am now looking into either building my own home or buying an existing home.
Finances/Expenses:
3 car notes - 45k, 35k, 14k - roughly 2k/month
credit cards - no balances
student loans - $50/month - $20K balance
Weekly income: ~10-13k gross
The problem that I appear to be having is my length of self employment - I have not filed taxes yet, but have been in the same industry 1 year prior to working on my own and did file taxes last year - yearly income at that time last year when I filed was 26k
I can put around 50k down and I am looking at around 200-350k purchase price.
What are my options?
At this point save some money.
What are your current scores (mortgage scores preferable)?
To confirm: you made $26,000 last year in your current industry and are now self employed? And your income is now $520,000 to $676,000 a year? (Weekly income: ~10-13k gross)
Honestly, that is where I was lost. Great job on the increase in pay!
Experian - Fico 8 = 639; Fico 2 (mortgage) = 625
Transunion - Fico 8 = 637; Fico 4 (mortgage) = 577
Equifax - Fico 8 = 601; Fico 5 (mortgage) = 581
Basically, I was working with a guy at a office making around 12-15 an hour (there was a lot of overtime, so it was probably more like 45k that I made) and he had a client who was bringing in a lot of work (my current employer was supplying the man power and getting a percentage of the jobs pay). The client needed help in the processing department, which is what I did. I worked for him doing it from home and was projecting to hit 100k/year. I quit after 3 months of doing both and shortly after I was doing it on my own from home, my current client decided to cut the former boss out of the equation and I recruited contractors across 20+ states and now receive a percentage of the pay, on top of processing. Very unique situation.
To my understanding, a lender is going to require a minimum of 2 years tax returns for self employment.
I highly recommend that you contact a lender because being self employed can be very tricky, especially if your income goes down next year. It's not a matter of you staying in your current industry, it's more a matter of you now being self employed.
My recommendation? Don't rush, invest your money and save more money. With an income like the one you say your making, you be living in a significantly better/bigger home in a year or two then a home that a lender will be willing to finance you for now.. You'll be able to put down much more money and afford a larger home.