If you are self-employed and want to buy a house...

It's great being self-employed but when it comes to buying a home, here is what you should keep in mind:

1. You will need a great credit score (that's a given for everyone) - 640 or more.

2. You will need good credit history. Typically, if you have a restaurant or convenience store, where sales may be in cash, then you are very likely spending that cash and not using a credit card. Car payments will be part of your credit  history, but you need to show at least 2 lines of credit. Get a secured credit card with a small limit and use it for your day-to-day purchases. Pay the balance off every month as soon as you get the bill. This will go a long way towards building your credit history.

3. You will need tax returns for 2 years. Here again, the tendency is to show a smaller income or take a lot of deductibles. If you don't have sufficient income, no loan officer is going to work with you.

Plus... all buyers (not just those that are self-employed) will need:

1. Some money as down payment. Depending on the type of loan, you may have to put down anywhere from 3.5% to 10% of the purchase price. Or even more.

2. Money for closing costs - these include lender fees, attorney and title fees, items to be paid in advance and reserves with the lender.

Here's a tip: when talking to a loan officer, make sure you know what your monthly payments are going to be - mortgage payment (principal + interest), taxes and insurance. And to this, add utility charges.

You must be comfortable with this figure. This will determine the price range you should stay in.

Finally... never ever be house poor. That is, don't let all your income go towards paying for the house. You need to have the basics - food, clothing and school, but you also need to have some fun.

If you want more information on buying a home, call me at 803-348-9922 or email me.