If I(single male) have 750 FICO score & make $2,600 a month before taxes, could I get a loan with good rates ?

Question

If I(single male) have 750 FICO score & make $2,800 a month before taxes, could I get a 30 yr fixed loan with low interest rates for a $500,000 3bd/2ba home near Los Angeles?

I do have a 2nd job which I make additional $2,500(doing mechanic work for customers on weekends & at night after my regular work) but I get cash "under the table". Is it going to be a "do-documentation" loan or can it be a regular loan since I only have $2,800 official income which probably is not enough for a $500,000 house. Could you be specific?

Answer 1

You are correct and 2,800 per month would not be nearly enough income for a 500,000 home purchase. Taking your extra income into consideration you would have a couple different possible ways to qualify for a loan. The easiest way would be to obtain a no documentation type loan because you need to use income that is not verifiable to qualify. With a no doc. type loan you will not have to verify employment history or income at all which will work out well. Your credit score will be a big asset to obtaining this type of mortgage.

The other option is to use some type of bank statement program so that you can still go full documentation with many lenders. You would need to provide 12-24 months worth of bank statements (depending on the lenders requirements), add up all of the deposits and divide them by the required number of months of statements. This may work if you deposit all of your money into the bank and if you do not have any other liabilities. Here is a good link about alternative income documentation loans listed in the source section:

I hope this helps and keep in mind the easiest and best loan type for your situation is probably going to be no doc.

Answer 2

Your under the table income is a problem. First of all, of course, it's illegal - if you do get a house, the IRS will probably end up with a lien on it when you get caught. But that aside, you can hardly go to a bank and say "oh, and please consider my illegal income also, not just my legal income that I'm paying tax on" - now how would that sound?

The 750 FICO score is very good, and would qualify you for many loans. But since a loan of $500K over 30 years would have a payment higher than your declared TOTAL income even BEFORE taxes, you're not likely to qualify.

You could "fess up", and amend your last few years tax returns to show ALL of your income - that might qualify you for the loan. Of course, you'd also owe significant amounts of taxes, interest and penalties for the amount you cheated on, in addition to the tax you'd have originally owed.

You've dug yourself into a hole. Now you have to live with the consequences.

Answer 3

Even if you can get a no-doc loan, you probably can't afford the home anyway.

Debt service on $500K will be in the $3000-3500 range, depending on rates. Add another $400-600/mo. for property taxes, $100-200 for insurance, and you could be at $4000/mo. pretty quickly. Utilities for a home that size would probably run another $200-400/mo.

I assume you have a car, you need gas for it at a couple hundred bucks per month. I also assume you prefer to eat daily. Add another couple hundred bucks per month.

See where this is going? Just because a broker can get you financed, doesn't mean you can make the payments. And no, you can't qualify on a fully-documented basis, so you could end up with much higher payments than I estimated (6.5-7.5% range). Assuming you have no downpayment, you might very well land in the 8-10% range (investors have little appetite for 100% no-doc loans right now, so rates are very high).

Answer 4

You have a very good credit score. I will also assume that you have paid your annual taxes.

When you get a loan, you would need to show proof of income, they will ask you for 2 yrs. income tax, last 4 pay-stubs, etc.

If you can not financially afford to pay for a loan, especially that high with the income that you are saying, then you will eventually default.

Their are many lenders out their that will try or will to set up a loan program for you. Be careful though about the predatory lending practices. Their have been many unfortunate people that lost their homes, because they wanted to go over their means.

Here is a link that will explain more about these mortgage companies.

Answer 5

A mortgage for a very stable borrower with excellent employment and credit history. These are sometimes called "vanilla loans" because the meet general mortgage guidelines and are easy to complete.
This type of loan/borrower often qualifies for the most attractive rates available. A credit score of 720+ is one of most important criteria in establishing a “A” rating.

You can use the second job as income if it is verifiable and you have been there over 6 months. If not go stated income, with a 750 credit score yyou can still get 100% financing with a stated income loan.

Answer 6

you can get a no doc or siva (stated income verified assets) loan assuming you have something in the bank to verify. however with both incomes you have you still cant afford this house. sorry but its true. i wouldnt even try and ruin that great credit with a foreclosure or bankruptcy. sorry!

Answer 7

Apply for a loan and find out.