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Self employed making less than 30000. What kind of loan can we get?

We're self employed making about $30,000 a year. Currently we rent an apartment for 1100 and the rent is about to go up again. What are the possibilities to get a mortgage for a $100,000 home? We can put about $15-20,000 down. 
  • May 24 2012 - Pearland
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Answers (1)

Assuming you have no other debts on your credit report and 30,000 is your net income, with 20% down payment you would borrow 80,000.

A good rule of thumb is you can get approved to have monthly payment at 45% of your qualifying income.   Expressed monthly 45% of your income is 1,125.

A 30 year fixed 80,000 loan would be ~$380 per month for the loan, ~$125 for property tax and ~$60 for home insurance (these are just guesses on tax and insurance).  That gives you a $565 housing expense which fits very comfortably.

If you have other monthly expenses such as car loans, student loans, credit card debt, add each of those monthly payment to the $565.   If that sum exceeds 1,125 you will have a hard time qualifying.   If it is below your chances are good as long as credit scores are strong.
  • May 24 2012
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