10/29/2024
Yesterday I was consulting would be First Time Home buyer. He came to US about 2 years ago and have Employment Authorization card with the code C09P. He opened Corp S about 1,5 years ago.
Credit is good, with small credit card debt. No car, no educational loans , no child support (it may not be shown on credit report, but has to be considered.)
And his last years income tax show only $10,000 taxable income, as everything is written off. So, what are his options.
First let's check if his C09P code is eligible for financing. OK, looks like this code is good.
Now employment. The borrower is self-employed for only 1,5 years. Not really good.
We have to wait for 2 years of self employment. Then we will have the options. As the borrower's income significantly increased - we might be ok, however we have to take average income for 2 years, which means the next income tax should be really really good. Or we may take so called NQ loan - 12 month bank statements or Profit and Loss statement in any case business must have nice cash flow.
IF the borrower does not want to wait 6 month - I offered another option: there is a bank who would give mortgage self employed person for 1 year only and with 1 income tax only - (still need to wait for good income tax). However if conventional loan can be done with 3 to 5% down payment , the niche loan require 25% down. As my borrower don't not have such kind of money - it is not a valid option for him.
Bottom line - let's wait for the next year income tax and figure out for how much the borrower could be qualified. Based on the subject property county, 3 to 5% will be required for down payment if we are able to go conventional.
Any other ideas or suggestions?
