preparing for a pre qualification for a loan

[Anonymous]

Hey guys im in the process of trying to have everything i can before i apply for a loan within the next 2 months however i need some guidance from you so i can be steered in the right direction i am in the process of paying off my cards from smallest to biggest to get out of debt as much as possible before i apply  

income last year after deductions $30100

so i work fri nights and sat nights at the restaurants partime and report only credit card tips is it a problem to keep depositing like 150 every weekend cash

I also do pressure washing on the weekends and lately have been making around 400 a weekend i get some personal checks should i deposit any or will it be a problem down the road when they look through my bank statements? I was hoping i can deposit and could help as a more monthly income.

credit score: 680

Location:GA

Type loan: usda or fha not too sure as i havent pre qualified yet or tried yet

Downpayment: 5k

Debts: 

12/12 accounts in good standing 

0 collections

only have 1 30daylate and 60daylate  on macys from 3 years ago 

Credit union credit card: Bal: 2500 limit :2700

wellsfargo cc: Bal: 800 limit:4200

walmart cc;Bal:300 limit 800

jcpenny cc: Bal 400 limit:1700

cap 1cc bal:100 limit:500 

autto loan with credit union: 21900 433 payment

By next month my goal is to only owe wellsfargo and the credit union . My sister offered to take the credit union as a balance transfer to help me out and get it off my credit so i can get a house as her and my mom did the same and she had like 6k in debt.

[Anonymous]

Hi - sounds like you've got a good plan.  For the deposits, I believe lenders will look for a logical explanation for any deposits made that are out of the ordinary, so you should be prepared to offer up an explanation, as you did in your op, to the lender/underwriter (perhaps in letter form, not sure).  From what I've seen, your credit score looks good for a loan.  I would do a Debt-to-Income percentage (front and back) based on your annnual income, divided by 12 and your monthly obligations/debts.  You'll want to see arount a 29% DTI for front end and around 36% backend (VA goes to 41% or so and doesn't do front end DTI).  There is some leeway but I think it depends on which program and which lender you are choosing.   Best of luck with your loan qualification letter.  Remember to get an approval letter later on as that's the better of the two letters to be armed with

[me12345]

The Restaurant work & the Pressure washing jobs are great for paying your debt down, However, you will need a 2 year history on your tax returns if you want to be able to use it as "Qualifying Income" 

Thanks,

[JVille]

“After Deductions $30,100” exactly what are you meaning? After taxes? Income used to qualify is your Gross wages before any deductions for W2 wage earners.
Your side jobs only count IF you have 2 yrs years of that other income in your our Tax Returns either as W2 wages or Sch C self imployment income. Income not reported to IRS does not count for qualifying purposes (under the table) and a 2nd or 3rd W2 job also won’t count for qualifying purposes if you have not continually been on those jobs for a full 24 months.

Finally USDA and many 1st time buyer programs are income “limited” based on household size. So will your extra jobs may not be usable for qualifying purposes they can be used to “Disqualify “ for making Too Much for the program. Kinda damned if you do and damned if you don’t!