whats the best way to get a mortgage when self employed?

[nish129]

Hi All,

I have a home now but in about two years I want to sell and get a bigger home. My husband will be on the loan as will. I just wanted to know what things could I do now to make the process not as stressful from when I bought my first home in 2005. I needed bank statements,tax returns,letters...

If anyone can give me any advice it will be greatly appreciated.

[Anonymous]

Same situation....if self employed you will be required to provide statements, tax returns, etc.  Previously you could do a stated income with a down, but that is pretty much gone.  Now you pretty much have to validate income and self-employment will be scrutinized moreso than W-2 income.

Make sure to keep CR clean (clean up if needed), keep cc utilization low, pay down installments and autos, build cash reserves (they like to see money in the bank or investment accounts) and have your down payment ready to go.

Also, the higher down you can make, the better you're treated, not to mention the more protection you have from fluctuations in market value.

Your house payment needs to be within the allowable debt to income, and total debt as well.  So, make sure you don't look like a pauper on tax papers.

Message Edited by txjohn on 04-13-2009 06:26 AM

[DallasLoanGuy]

Talk to a lender soon to make sure you don't write off too much(lowering your income too much)

[nish129]

Will I go through the same process even with my husband who is not self employed?

[nish129]

How soon before we want to move should we apply for the mortgage loan?

[Anonymous]

Depends on how much income is W-2.  Like tax returns, w-2 income makes things much easier.