I'm about a month away from starting the process of applying for home loans and have a few questions related to my commission based job and what challenges(if any?) that may present versus a salary based income.

Couple of things upfront if it makes a difference:

-First time home-buyer
-750+ credit score
-My job has a base salary of $2k/month pretax
-Will be applying with zero monthly debts
-Planning for down payment of 15-20% but want to be flexible depending on home condition
-No significant credit history other than CC's(paid cash for current vehicle, first time buyer, etc.)

Some of my initial questions are how a lender may view my debt to income ratio? How big of a factor is the lack of credit history going to be? Are there any specific loans geared towards someone in my position that I should be considering?

Thanks in advance for any advice y'all may have!

So you have given some good info but to answer we need more

-What do you do?
-How long have you been commission plus?

I would shoot for 20% down, but remember you will need 2-3% for closing and 2 months of payments left in the bank or retirement accounts for reserves.
Zero debt =/= lack of credit history, if you have cards and have ever paid them you are probably fine.

Happy to help. Email is in profile if you want to take it offline.

BTW don't forget you only get a couple of posts a day with a new account.

TOPancake,

All of us lurking Realtors want to know where you will be buying.

Thanks for the response Deats.

-I work in aircraft sales
-Have been with the company for 5 years and on commission plus for the past 3.


Regarding the reserves for future payments, I was under the impression that most lenders wouldn't consider retirement funds for that purpose as they can't be quickly liquidated or easily used in an emergency? If that's not always the case, that may be a little more pocket money I could plan for towards a down payment.

In the interest of trying to cram as much information as I can into my limited posts, is there a situation where it makes sense carry minimal CC debt into the application process if it means more towards a down payment? Essentially, my current plan is to wipe out any monthly debt from the start in order to make my debt to income ratio as attractive as possible even though it'll never break ~75% ratio based on my monthly salary.

Bill:

I'll be somewhere in Denton County. Further north the better but home price is going to be the biggest driving factor there!

Thanks again for the advice all.

Email me(profile) and lets talk current situation.

If ratios are an issue, pay down debt.

if cash is a bigger issue hold to your cash.

Retirement funds are usually discounted and most times are accessible with penalty in a bind, We would need to establish that for an underwriter.

Income wise. Plan on providing a detailed breakdown of your income for 15 and 16, we would average the commissions and add your current base salary. That would be our income number, as long as 2017 is on track for a repeat. There are variations but that is the most basic.

Your ratio based on your base is not a factor as long as there is history and an expectation of continuation.

Why does he need reserves?

It depends on the program. I am trying to give them generic info that applies broadly. Any more questions or suggestions? Feel free, I am sure you have a better way.

Nope. Just asked a question.