Do we need to get married to qualify for a conventional loan???
After several years of looking, I've finally found a $190K dream house close to the shop I co-own, that I want to jump on before someone else does! Houses in this neighborhood NEVER go up for sale!! I've looked at it several times w/ a contractor and it only needs cosmetic work done. So first I went to a mortgage broker, but I was put off by the $5,000 in fees they tacked on for themselves just for one meeting, plus they thought I should take out an FHA mortgage despite the fact that I'd saved up specifically to put 20% or more down on a house. Which meant my monthly payments would end up being hundreds of dollars more than a conventional loan. So I went to my local credit union, and everything was looking good at first (I have a 734 median credit score, my income is just high enough to qualify on my own, and I have proof of income for the shop I own with the last 2 years' worth of tax returns)...
BUT! Here is what kept me from getting a loan w/ the local credit union: I've only owned the business for 1.5 years. It's a 25-year-old business that my boyfriend and I bought in August 2009 and changed the name of - so I don't have a full 2 years' worth of history owning this business. My partner/boyfriend worked there for 6 years before we bought it. Our income has been steadily going up.
Another problem is that despite my high credit score, the credit union requires me to have 5 different loans or credit cards on my reports, and I only have 3 - a $20,000 personal loan (paid off), a $7,000 personal loan (paid off), and a $13,000 student loan (making all payments on time). I also have a $50,000 business loan which we have paid off halfway, making all payments on time. But that doesn't show up on my personal credit. I do not have any credit card debt, which it seems they really want me to have. Ugh.
So, I tried to apply with my mother as a co-borrower, but her existing mortgage makes her debt to income ratio too high to qualify on her own, and we each have to qualify separately for the full amount (I didn't realize this). This also means I can't apply with my partner, because I own more of the business than he does, and this makes his income too low to qualify separately for the loan.
DOES THIS MEAN WE HAVE TO GET MARRIED??? If we got married, would they count our income and credit history jointly? Does this mean we'd have to file our tax returns jointly next year, though? That would make us owe a lot more in taxes, than filing separately. I'm not sure what to do.
IS THERE ANY "NON-CONFORMING" LOAN I MIGHT QUALIFY FOR? Like a 5/2 or something? I really don't want to get an FHA loan, because the extra insurance tacked on would make the mortgage unaffordable for me, ironically. This is really frustrating, because I am SO CLOSE to qualifying for a conventional loan! Are there any bigger banks that may be more lenient than my local credit union???
If I could just wait until August, this would all be so much easier, but the only house I'm interested in around here is up for sale NOW, and I've just heard a family member of the seller has offered to buy it for a small sum. It's been on the market for 6 months...