So in keeping with my mission to help people buy homes, I put together this little list on what you need to know if you’re an entrepreneur who wants to buy a home.
- The ability to qualify for a mortgage is based on 3 things: your income, your assets and your credit.
2. You make your money when you buy the house, not when you sell.
3. You need to be in business for at least 2 consecutive years, and your income is averaged over the last 2 years to qualify. So you need to have 2 years of positive income. The average of the two years net profit is what the bank thinks you make.
4. Your credit should be at least a 620 if you want to get a mortgage in today’s lending environment. Though you can possibly get a mortgage with a lower score, 620 is the ideal minimum standard.
5. You can get the seller to pay your closing costs using a sellers concession
6. Your credit score and amount of down payment affect your rate. The lower the credit, the higher the interest rate. The lower the down payment the higher the interest rate.
7. Do not cosign for anyone if you can help it because his or her debt becomes yours. Car loans and mortgage liabilities can be waived if they are paid on time for 12 months with no late payments by the person you cosigned for.
8. You do not need to put 20% down. You can do a down payment of as low as 3.5% but you must have money for your closing costs in addition to your down payment. If you are a veteran, you can do 100% financing but you still need to have the money for closing costs. Also try to have some money for reserves. You can also get gifts for your down payment. 5% must be your own funds on conventional is you are putting less than 20% down. On FHA all can be gift funds.
9. It’s easier to get a mortgage when you still have a full time job
10. Owning a home and paying interest on a mortgage can save you money on your income taxes
This is just a brief starting point. If you want to know more, you’ll find out everything you need to know in my book : “The House Hustle: The Insider Secrets To Buying A Home For Black Entrepreneurs”
Connect with me at The House Hustle.com