Here is my situation and I'm hoping to get some good ideas on what our options are for financing. I'm 25 years old, married. My wife is 26. I'm classified as an independent contractor and my wife is a manager of a dental office. I have been an independent contractor since March. We are looking to purchase our first home and found a property to our liking that is a FSBO. They are asking 168k for the property which appraises for about 178k.
We would prefer to put little to nothing(preferable) down on this home. Our credit scores are similar, hers in the upper 620's and mine just under 620. If you were presented with this situation, what would you suggest to do? I appreciate any help and advice that is given. If I have left out any other critical information, let me know and I will ammend. I look forward to learning a great deal and hope that it is a positive experience.

Regards,

Joe

Continuous employment history is important so you should put your wife on the loan as the primary wage earner.

If you can't or dont want to document your income, a 620 FICO will get you 100% financing without income documentation. You can use my closing cost estimator to help you figure out exactly what you need to bring to the table. Go here to give it a try.

Thank you for your advice, we're going to be making a few adjustments to get my fico bumped up to 620+ and then analyze our options once again.

Here's a few ideas that will help you improve your score:

1. Pay down credit cards to about 35% of their credit lines. DONT pay them off completely or close them out. The lenght of time your accounts are open helps your score

2. Look over your credit report and make sure there are no errors. If there are you'll need to write letters to the credit reporting agencies to have them corrected.

Theres also a few tricks you can use to increase your credit score significantly for just enough time to get your loan done. email me if you want more info on that.

you can ask the seller to carry back 20% of the mortgage while you get an 80% LTV.

heres a few ways to get in without using your credit.

if you cant qualify for a loan, you can ask the seller to carry the full 100% note for 2-3 years until you can qualify for a conventional loan.

you can take over the property subject to the existing mortgage and assume the payments until you can refinance or get a new loan.

As Aaron said I would go with your wife as the primary also. If her income will allow you tommet the debt to income ratio you are in good shape. If her income alone does not work than do a stated wage earner loan or a no-doc in her name to get the 100% financing. No matter what your score is you will have trouble becasue of your employment history. What did you do before you bacame an independent contractor?

The trigger for balances in relation to credit limits is too high on revolving accounts is 30%


Yes dispute all derogatory open credit with all 3 credit bureau's.

But, to answer your question I would need more information. If your wife can debt ratio on her own you may get a better rate.

Your employment... Self Employed? If so 2 years tax returns and they use your profit and may add some deductions back for qualifying purposes Full Documentation which is the best rates.

Right now I feel if you are self employed your best option is a Bank Statement program using your deposit totals for 6 mo, 12 mo, or 24 mo. (The longer the better your rate will be)

So if you want try to give some income information. Then I can try to give better advise. PM it if you would rather not make it public.