Buying a cheaper house/Does anyone know?

Avatar for colomom99
iVillage Member
Registered: 03-28-2003
Buying a cheaper house/Does anyone know?
12
Mon, 05-11-2009 - 9:06am

Good morning: As we continue to sort things out financially one of the things we are seriously considering is trying to sell our house and buy something less expensive. I love our house and the incredible open space views but frankly with my income down to a fraction of what it was and my husband's company demanding pay cuts and unpaid furloughs we really have no business in such an expensive house. Here's my question:

We have a lot of credit card debt. An embarrassing, shuddering amount (about $65K or $1,300 a month minimum payments plus one car loan of $360). I am working hard to pay it down, always pay more than minimum and target one bill at a time. I've wiped out several bills and our total truly is dropping from a high of over $70K just a few months ago. Does anyone know about how they calculate income when applying for a mortgage? I was operating under the assumption they would only look at my husband's income but now I am wondering.

I was told I couldn't count my income as a freelancer at all for two years and then they would average the annual income. I was laid off in June 2007 and made no money to speak of as a freelancer for about six months. But our tax forms for 2007 reflect a half year with my former company or about $25K. In 2008 our taxes show about $13K income for me. This year I have already topped that and I am hoping it will be around $20K

Can I use my 2007 and 2008 incomes to help qualify for a mortgage? It would really help with our debt to income ratios. We would buy something about 100K cheaper and providing our current house sells would have a 20 percent down payment plus maybe another 20 or 30K to throw at our debt.

Jenny

Pages

iVillage Member
Registered: 12-29-2008
Mon, 05-11-2009 - 7:52pm

Jenny,


Heather made a very, very good point.

Pages