Sami's Work at Home Guide

Question: Can anyone review my financial info and let me know if you believe I can qualify to purchase a home?
Hello – I would like to give you some of my financial information to see if you believe I would qualify for a loan before having to run my credit and have points deducted.

I turn 20 years old in the fall. I own a landscaping business. I have been living with my parents to be cheap and save money for as long as I can hoping to buy a house and to build a good financial cushion I make a base salary of $ 2,653.00 each month, $ 31,836 a year. The business pays pretty much all of my expenses, cell phone, vehicle, fuel, insurance, 50% of health insurance, office telephone and internet – pretty much everything but food, hygiene, clothes, and entertainment. I feel very comfortable with roughly a $ 900-$ 1,100 a month payment, by IRS regulations I am able to reimburse myself 15% of all expenses for a “home based business” (my office) for (mortgage payment, water, electricity, TV, etc) so I plan about $ 130-$ 150 from that.

Experian reported my credit as of 7/31/09 of 742

1 account now closed, no late payments etc
1 account open – $ 500 limit no balance (paid off each month)
1 account open – Business Equipment Purchase roughly $ 15,000 remaining of $ 24,000 – no late payments etc.

Where my problem is,

In 2007 I reported $ 19,000 in gross income from a previous employer – 3 years of reports
2008 $ 10,000 (first legal year in business, about 60% of my wages were under the table which hurts for my situation now)
2009 –

I am also employed by Sheetz for the winter, basically just a hobby to have something to do. I roughly pull in about $ 2,500 over the 3 winter months working part time there.

Another problem is I do not have a co-signer.

I would like to look into purchasing within the next (3) months if it is possible, I just would prefer buying then renting.

If you believe I might be eligible let me know and we can go ahead and do the actual prequalification – I just don’t want to run my credit if I have a few possible reasons that can revoke my qualification.

Answer:

Answer by Professor Wonderful
{Nothing in this commentary is to be considered as soliciting business in an area where I am not licensed.}

When Fair and Issac started their rating system, they took into
consideration a massive amount of information. Their FICO system is very accurate.

When I handled mortgages, a score like yours would be wonderful. Now, it is even better. You are in a great position. And, since you are not in a rush, take your time looking for your dream home.

Tip: If you find one with a large yard, you may someday be able to construct a mother-in-law cottage on the property. This can be rented out to help build a cash reserve in case you suddenly become unemployed for reasons beyond your control. (In my field, I would suggest you protect yourself for such contingencies as disability. One drunk driver can wreck more than your car.)

I do not understand why you are willing to go through the approval now. You should have no problem.

Additionally, you DO NOT want a co-signer. And, you do not want to own the property in your personal name. You can own it as a Family Limited Partnership which your Limited Liability Company will manage. You will then offer two hoops through which an attorney will have to jump, should a power mower throw a piece of gravel at someone who sues.

Even your equipment should be separately owned. I advise potential clients to establish a Children’s Trust. The trust then owns the tools of the trade. The parent legally rents the equipment from the trust. It is totally deductible as a business expense. The children’s trust grows with preferential tax benefits. And it is unlikely that a lawsuit against you can deprive you of the truck, the tools, or even the desk.

There are many things you can do in advance to enhance your vitality as a business owner.

Speak with an advisor before you even run the first credit check.