Home Loan Question - Young Buyer

**MrRumpus** · 11-04-2011, 12:30 PM

Hello,
I am interested in buying a house. I have rented houses for the past 5 years (I am 23) and have finally found an area I can see myself staying in. I have some questions regarding my chances of getting a loan, what loan type is best, what is the best approach to document my finances and present them to a lender.

Here are the facts:
The house in Tampa,FL is $20,000.
I have a down payment of $6000.
I have a good credit score of 715, no negative payment history.
I have very little student loans, <$4000.
I have rented a house for $1200/mo for the past 1.5 years, only name on lease.
I am co-owner (1 of 2) of a small business that makes around $100,000/yr.

The only negatives I can see, from a lenders standpoint, is that I am young, my entire credit history is around 5 years old. Also, my business is just over 1 year old. This house is cheap, and I obviously am capable of paying a $14,000 loan off. I intend to pay it off asap since I am a bachelor and have very little personal expenses and no dependents.

My questions are:

What is the best approach at documenting my finances to present to a lender?

What type of loan is best for me?

What are my chances of getting such a loan?

Any advice is much appreciated!

**landontreber** · 11-04-2011, 03:03 PM

The best approach to documenting finances is your tax returns. This is always the problem for self employed borrowers. If the income doesn't show on your taxes, then you have a problem.

The best type of loan depends on the property. With that low of an amount, you may just want to get a personal loan to buy the home, and then pay it off in a couple of years. Not sure if they even make mortgages on that low of an amount?

Chances of getting some type of loan are high, if what you say is correct. Even with the credit crunch, a 715 score and verifiable income will go a long way! Speak to a local lender to see what the deal is.

Good Luck!

**clemy** · 11-05-2011, 12:30 PM

I suggest you look into non-mortgage forms of financing because even if you are able to find someone to give you a mortgage that is that small, the fees charged will be in the 10-20% range. It might be easier to charge it on a credit card and then get a 0% balance transfer. You wouldn't have enough mortgage interest to deduct it on your taxes any way.

**LVVR** · 11-06-2011, 03:38 PM

That's a pretty cheap house.
If you don't have a few different types of credit, and have been paying them off regularly, it might be best to do that. Banks don't like giving out loans to people who haven't built a good credit history with them even if you have a good credit score.

**CC Lifestyle Realty** · 11-08-2011, 09:04 AM

For that amount don't get a mortgage. You will have a hard time finding a bank to even give you a mortgage for that amount. There are other avenues available and a few were mentioned above.

**Chris Kukelhan** · 11-18-2011, 01:24 PM

What is the best approach at documenting my finances to present to a lender?
- tax returns and bank statements (deposit all your income)

What type of loan is best for me?
- You may not need a loan but if you do, with a 20% down you won't have to pay
PMI on a conventional loan.

What are my chances of getting such a loan?
- I would say very good as long as you can document your income.

**VancouverWa** · 11-21-2011, 11:28 AM

Does that include the lot? More information on the property would be helpful in determining the best financing option for you?

Still, I would look into other forms of financing. Hard money lenders would definitely take a look at you, unless your buying a goat shack.

Is the seller willing to offer terms?