Maybe you can find a foreclosure and pay for it in cash as another reader stated above. There are probably plenty in San Diego. Good luck.

Good luck Pat!

I went through the exact same thing just a few weeks ago. I still have a full time job (fortunately or unfortunately depending on how you look at it) that doesn’t make enough to get a mortgage. I’ve only been with my business of selling books on the Internet for about a year so I was told we’re SOL as well. Unfortunately, we also don’t have a down payment set aside so we axed that idea. We’re going to have to save some for a down payment, wait another year until my business has been around that long and then look into it.

It’s a ton harder than when we first got our house!

True paying cash means you don’t have to qualify for a mortgage. Though as discussed above there are other ways to get around the mortgage issue.

A mortgage is not evil though some people want to treat it that way. Managing your money and your finances can involve a mortgage in a carefully thought out plan but like any plan you have to be aware of the risks.

For another, there are a lot of people who got the tax deduction and “low” interest rates and had their nice and liquid money working for them elsewhere… and many of them are in foreclosure now…

What would it take to just pay cash for the whole thing and be done with it? You’d save a lot more than $8000.

Just wait for 8-9 months, save all the passive income you generate and buy the house for cash.

Now if his revenue was 20k/month and his expenses put him under the income threshold he could qualify. Just remember revenue is not profit.

And the first time home buyers credit was a bipartisan bill, so even though I am in complete opposition to Pres Obama and his economic plans, we can’t lay this one completely on his doorstep.

This EXACT thing was our problem over the past couple of years. I have some warnings and you’re free to email me if you like for more info.

There are a lot of details but I’ll keep it really as short as I can. We found a home we liked and got pre-approved. BE CAREFUL OF THAT! That paper is worthless. We went through with all the paperwork and were told we were approved by our bank (only much later we understood that an approval is also a pre-approval, and nearly as worthless. You must go through underwriting and get approved by them in order to absolutely know that you are getting the home). We were told one week before moving that underwriting did not approve us. We had plenty of income, but because we were contractors (both) and even though my husband was with his company for years, they still didn’t approve. Owners got p’od and sued us. We’re still going through that two years later. We did nothing wrong. We tried everything we could to get that loan. We were told we could possibly get a slider loan – good for those who are contractors – they don’t have all the requirements but your interest rate is much higher (it’s an ugly option).

So we hung out in an apartment for another year, and I saved a bigger downpayment. Definitely helped. We both had good credit (didn’t help us that first time around.) But the second time we were able to get the home – it was a foreclosure in really good condition. I think that also helped that we wanted this house.

Additionally – the bank that came up with the loan for us and helped us most was our very own bank – Chevy Chase Bank. We didn’t try them the first year, and went with PNC, who screwed us over big time. But Chevy Chase was great to us and part of what helped was that we’d been banking with them for some time. So I would suggest not to turn your back on your bank and try going to them to get the loan. They know your income – your history, even though you’re not working for someone else. (what the heck is the REAL difference anyway!!!??)

Anyway good luck and I’m sure you’ll be fine with that much income as well as a 20% downpayment. Just don’t bite off more house than you can chew. Keep your sites more modest – you’re still young and can buy a banger of a house later if you want. Keeping the price of the house far under what you can afford will really help you get into a home more easily.

@Gankaku on Twitter

I have to say that now would be a great time to start looking for a home but not sure I would let the credit be the deciding factor. They are also talking about extending it and increasing it. Of course depending on Congress to do anything is a veritable crap shoot.

Buying a house is a major step in any environment so make sure you buy well

BTW, from the discussion I had with a mortgage guy two weeks ago– you want to start very early and leave no stone unturned as a source for your mortgage.

I like http://piggington.com/ for San Diego real estate info, too.

-Erica

On another note, I think you would be absolutely insane to buy a house in San Diego right now. Houses are depreciating at a decent clip, and to make matters worse there’s no inventory on the very low end. You’d be more successful if you waited until the $8K tax credit expired.

Besides, don’t you make way more than $75K/year? You don’t qualify for the $8K if that’s the case.

I write a lot about real estate, and (of course) have been heavily researching the San Diego area, and it makes for more sense to rent than to buy. Wait until you have 100% down; then you won’t have to deal with the mortgage companies. (And in the meantime, interest is working in your favor instead of against you — and housing won’t appreciate for years anyway.)

-Erica

You can also do it with a C corp but they tend to involve more paperwork.

Both options would also improve your protection in your business and give you some new options for saving for retirement. It might take a while to transfer all the earnings over into the business name though.

It would also give you the side benefit of lowering your chances of being audited too

Good luck with it.

I have a relative that tried to purchase a home with Florida and had a disaster of a time. From what I remember it really helps if your spouse can prove their income on top of your down payment & business income.

Have you considered increasing your down payment?