Mortgage for owner operator for house??

You can call me a fool all you want but when someone says "im in the business" I figured you would have a little knowledge on the subject; for many, paying closing costs can be a deal breaker.

The only fool I see here is you, considering "your in the business" but dont know all the different types of loans and programs available; would hate to have someone of your (non)expertise "helping"

Oh one more thing when using a goverment program, they usually have the seller pay closing costs........

Pissing match over "fool".............

 

This is an old thread, but it seems to relate to my question. I'm an owner operator. I have about $20,000 in per diem for 2015. I'm also trying to qualify for a Mortgage. In short, I do qualify, but I'm wondering if per diem can be "added back in" to show a greater income amount. For instance, my "In Frame" can be "added back in" but there doesn't seem to be a good answer out there for per diem, other than just not taking it, paying a bigger tax bill and then qualifying for a larger Mortgage as a result. Thoughts?

 

Your question, I'm not sure. How much are trying to borrow?

 

There are many plans for first time buyers.
Always Pre-qualify for the amount you'd like to borrow,before you start looking at homes

And Yes......Buying a Home is not that painful.

My best friend bought his first home in 2007..(Right when Banks were starting to figure out their mistakes they made borrowing mortgages to everyone )...

Here are the Facts... His credit score was 660.He made (at the time) $42k per year, And He was approved for $225,000.

He bought a nice starter home in Tinley Park,Il for $210,000 And property taxes accrue to $7,000 per year. AND He can afford it!

 

It's not really how much I'm trying to borrow. It's a technical question relating to the effect of per diem on the amount. Whatever it is that I am able to qualify for with per diem reducing my taxable amount, the amount I qualify for is larger, if I pretend there is no such thing as per diem because my taxable amount is $20,000 larger and thus my income is larger. Or maybe per diem (I hope) is disregarded such as one time expenses are disregarded.

For instance, I had an "in frame" in 2015. This is regarded as a "one time" expense and it is "added back in" for the purposes of loan qualification. Otherwise my income would be almost $18,500 lower for the purposes of qualification. Likewise I had about $20,000 in "per diem." Per diem as I understand it in the owner operator trucking world amounts to 50 some odd dollars per day that I am out on the road that I am allowed for the cost of being out on the road whether I spend money on personal expenses or not. This of course differs from how a company driver's income is changed for per diem. I received actual payment for per diem when I was a company driver the brief period of time in my life that I worked company.

I just want to know if in qualifying for a loan, I get to count that money as income, as an owner operator. Like I said, I've reduced my income for tax purposes by about $20,000 because of per diem. If there was no such allowance, for tax purposes, my income would be greater and I would pay more tax. With per diem, my taxable income is lower, and I pay less tax. About $4000 less. Does this also lower my loan qualification amount?

 

This would be a question for your loan officer.

 

Loan officers most often deal with "per diem" in other contexts where it amounts to a reimbursement for expenses to their employee. 99% of the time when they encounter the term "per diem" they encounter it for traveling salespeople and the like, all of whom are EMPLOYED. As an owner operator (of course), I'm in business for myself.

It is much more likely that there is someone in THIS FORUM who is an owner operator who has encountered this question in a loan qualification process, and who knows the answer. The number of truck owner operators encountered by my loan officer is negligibly small. Since I'm in the process of completing my taxes and since I'm also trying to buy a house at the same time, I'm trying to find out before I finalize my taxes and (perhaps), shoot myself in the foot. In short, the most likely person to know, and the quickest person to obtain the answer from, is a trucker who owns his truck who is in this forum. Trust me, the Loan Officers I encounter don't know much and I can't be confident they're right. They might be. They always insist that they are. They aren't always right.

 

You have more faith in answers on here to these types of questions than I do. I don't come here looking for tax advice and I didn't when I was trying to get a loan either. I just got a mortgage last fall on a property myself. Per diem never came up. They only wanted to see a P&L and that plus whatever other liabilities I had are what they based their decision on how much money they would loan me. I learned more in 15 minutes of talking with the loan officer than I could have ever garnered from the myriad of confusing sometimes even conflicting comments that get posted here.

 

There are two kinds of morgages, conforming and non-conforming. Conforming mortgages meet all the underwriting standards of credit score, income, downpayment, etc, and get sold to God only knows who as soon as they are written.

Non conforming loans are either sub prime, or under written "manually". You want to stay away from the sub-prime junk as it is high interest and generally has lousy terms.

What you are going to look for is a manually underwritten mortgage. Typically, your small town bank and your local credit unions do SOME manual underwriting. A human being, presumably intelligent, makes the decision whether you are a desirable customer based on ALL AVAILABLE INFORMATION. Even if you have NO credit score, they can check with your landlord, your employer, etc, look at your tax statements, etc, etc, etc. Then they make a decision on credit worthiness.

Having a meaningful down payment helps a great deal in the process.

 

I've never had a lender ask to see my tax returns -- P&L? sure. Per diem is not on my P&L because it isn't a real expense.

If you have 20% down, >720 credit, and the mortgage will be less than 25% of your income (35% if you include all other debts), you won't have any problems getting a competitive mortgage. If you're a first time homebuyer, you may even qualify with only 10% down.