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Can you help point me in the direction of a low-down home loan that FITS ME (read details before answering)?

Jen - 2008-05-17 06:35:10 - Renting Real Estate

Here's my situation: We are self-employed so need to do a stated-income loan. We've got more than enough reserves, but most of it is tied up in joint CDs we don't want to cash out. We're looking at a buying an existing home, but 20-25% down is just too much for us right now. We're thinking more like 10-15%. We've got about a 50% debt to income ration right now, however the existing home we're in is going to be rented out so that'll come down a bit. We don't mind paying PMI or a higher interest rate to not have to put as much down. We're in Southern California. Are there any options for us? 50% debt to income RATIO is what I meant to say. The home we're interested in is not able to be a HUD home or eligible for federal loans. The place is bank-owned. Yes, I do need to go stated income. I just went through the process of getting a construction loan and we had to do it stated income. Business owners often do that if they're not incorporated. Also, I've already been told by a bank that having a rental agreement for an existing home lowers your income to debt ratio.

Best Answer:

You won't qualify for any special programs owning income property. Also, you do not have to go stated income (which will not work anyway), just use your tax returns as proof of income. I have done it for years and have never had a problem. You will not qualify for a very large loan. Your rent will not count as income before you have it rented out. You have to have documented proof (at least one income tax return) of the income it generates.

Answers:

have you looked into government loans through HUD? I think they're called Fannie Mae, but I'm not sure about that.

WHILE you visit a mortgage broker and find a real estate buyer"S AGENT, [never a seller's agent--which becomes a dual agent if you fail to ask]-- if no ideal financial deal is found, ask for a lease-option house!

You won't qualify for any special programs owning income property. Also, you do not have to go stated income (which will not work anyway), just use your tax returns as proof of income. I have done it for years and have never had a problem. You will not qualify for a very large loan. Your rent will not count as income before you have it rented out. You have to have documented proof (at least one income tax return) of the income it generates.