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Self Employed and Home buying
 

As many of us here are self employed and I'm sure several of you guys have bought homes, how did you guys do it?

Im looking to purchase a home next year in CA. Have decent credit score and 10% downpayment on a 350k duplex.

Re: Self Employed and Home buying
 

Sacrificed a lot and didn't spend much, worked overtime, worked several jobs to get my first home and then gradually purchased more over the years. It's not easy and interest rates weren't that great when I first bought.

Re: Self Employed and Home buying
 

Hard work.

Long hours.

Hard work.

Long Hours

Hard work.

:juggle:

Re: Self Employed and Home buying
 

I bought a condo with early eB sales (back in days of money orders) - long long nights, little sleep...I was working sales on eastern standard time AND pacific standard time...wow those were crazy days...and I was in school at the time

Re: Self Employed and Home buying
 

WOW

Respect to you

Re: Self Employed and Home buying
 

RSOT: THE LEGEND! :thumb:

Re: Self Employed and Home buying
 

Guess i should have rephrase my ?. what kind of stuff did they ask for?

Re: Self Employed and Home buying
 

Up here, they asked for statement of tax...was different as a student though since I didnt really declare a lot of taxes ( :FF: ) - I didnt go for a mortgage...I had cash....was a very sick time of budgeting, saving, investing...

Thanks for the props

Re: Self Employed and Home buying
 

I think you'll find that lenders want more than a 10% down payment on an investment property. I'm assuming you're asking what documentation you'll need to secure a mortgage? Be prepared to supply copies of your last 2 or 3 tax returns (w2's, 1040's, et al), recent copies of bank/investment account statements, current pay stubs, etc. If you're self-employed be prepared to complete Internal Revenue Service Form 4506-T, which enables the lend to see your IRS tax transcripts.

Re: Self Employed and Home buying
 

When I bought my first home I was in my early 20s.

Working 16-20 hour days running my own manufacturing business and many days without any sleep at all.

Dont know your age or your credit and dont really need to know but I can tell you as self employed they will be asking for 2-3 years taxes, profit and loss statements, and other business info so they can be assured your income will continue so you can pay them.

A larger down payment will help a lot.

We did not buy until I had around 50% down at that time. I worked without sleep then to put away any money I could put a large down payment down on our home.

Age was considered as well as we were in our early 20s then and had only a few years of any credit history behind us.

Hard work, determination always pays off with a good decision of making sure you can cover your added expenses when owning a piece of real estate.

20 years later I am still a workaholic and work around 14-16 hours a day almost every day other then a day here and there to spend time with the family.

Once you get into the mode of working long hours and have a dream of owning your home GameFreak you will work yourself to death to obtain your goals. Which is a good thing.

For me, I dont like debt, have not had any for many years so hard work will pay off for you.

Good luck.

Get your ducks in order, paperwork, business plans, taxes, profit and loss, maybe even have an accountant go over your numbers with you to make sure they feel you can afford what you are buying.

Re: Self Employed and Home buying
 

those are just the info i was looking for. i have more money but i don't want to put down too much should something happen.

Re: Self Employed and Home buying
 

Large down payment helps you obtain the loan. Less risk for them.

Something you can toy with when applying etc.

Never hurts to ask, if I put down a little more does it help me with the loan?

Of course the answer is yes but you should see what would take your loan over the top to be approved.

Re: Self Employed and Home buying
 

Higher amount put down can mean better loan terms.

Depends on where you are going for finance.

Weight that up as well before making any purchase.

Do heaps of searching, talking, asking and study. Make check lists of your expectations. Refine those expectations.

Decide on a suitable lender. Discuss your vision with a Loans Officer before even finding that piece of realty.

California Housing Finance Agency - First-Time Homebuyers

First steps for first-time buyers - MSN Real Estate

What Are the First Steps in Buying a House? | Home Guides | SF Gate

As an aside, I do mean House Warming parties.

Good Luck

:juggle:

Re: Self Employed and Home buying
 

Agree with Sandy and GB, you should put a larger $$$ down, this way you have a higher chance of getting the property, plus the interest won't kill ya at the end.

Re: Self Employed and Home buying
 

The interest on a 30 year mortgage or so REALLY adds up...took real estate course and looked as what is being paid since it is compounded and such....insane

Re: Self Employed and Home buying
 

He could always go with a 20 year and try to get a lower rate also.

Re: Self Employed and Home buying
 

Homework done now before the emotional excitment of finding a property starts to cloud judgement is crucial.

For properties I have purchased with a mortage, I have always worked repayments out at a much higher rate than needed.

I allowed a safety net for the deal. Got caught twice where there were interest increases. But I was covered because repayments were higher.

Re: Self Employed and Home buying
 

Good advice as usual Greenie! We also did the same thing - pumped more into the mortgage than per usual and tried to live off the rest of our income so when interest rates did eventually go up we weren't struggling and had some equity that lowered the interest rate repayments.

Re: Self Employed and Home buying
 

Getting a loan these days in the states is much more looked at then in the past because of the massive record foreclosures we have had over the past 3-4 years.

OP needs to have everything lined up and ready to go right from the get go.

Check and double check your numbers, IDR etc before you apply.

IDR ratio is important when applying using self employment.

Re: Self Employed and Home buying
 

Also buy Income Protection - should you get injured and lose your job because of that - how are you going to make repayments? Not sure if this type of insurance is expensive in the US???

Re: Self Employed and Home buying
 

A dulex is not considered investment property. Investment properties are not considered until you reach 4 or more apartment units, most times 5 or more. The OP can get a normal mortgage rate on a duplex and most times on a fourplex.

Re: Self Employed and Home buying
 

A duplex is what i will be getting. Live in one rent out the other to family. IDR is NOT a problem as i don't have any bills but my credit ( 680 right now ) is little messed up from when i was 18 and stupid. Luckily those baddies will fall off late next year