Yes, Tipped employees can purchase a home in Bozeman! Do you get a significant amount of your income from tips? Do you want to own your own home but think you can’t qualify for a mortgage? I have good news!! With some planning and careful documentation, you can definitely purchase a home and even qualify for low down payment programs. Following are the very important steps to get you on your way to home ownership.
Steps for Tipped Employees to qualify for a mortgage
- Track your income including all of those tips! Get in the habit of logging your tips daily and then depositing them in the bank on a regular basis. Regular means daily or at the most weekly. Your lender will want to see these regular deposits to verify your income. Try and keep a log of your shifts worked and how much you earned in tips and then deposited.
- Pay taxes on all of your income including all of those tips! I know that you can probably get away with not paying taxes on everything (cash tips) but the income that you state has to square with the taxes that you pay. No way around it.
- You will need to show a consistent work history. That means that you have earned enough money at your job for 2 years and preferably in the same job for at least six months. So find a place that you like to work and that you earn enough money, and then stay there.
- Because the lender will look at your debt to income ratio, put off any other big purchases until your home is closed. That means no new cars…and while you are at it, pay off the credit cards asap.
There are so many low down payment programs out there to help you purchase your first home. Some are below:
Low Downpayment Programs
There are VERY generous programs out there to help with qualifying the first time homebuyer for a purchase with a low downpayment.
- FHA loan program: A loan insured by the Federal Housing Administration. Good for those with low credit scores and little money saved for a down payment. https://www.hud.gov/buying/loans
- USDA loan program: A loan program 100 percent guaranteed by the U.S. Department of Agriculture for lower-income borrowers in eligible rural areas. https://www.rd.usda.gov/programs-services/single-family-housing-guaranteed-loan-program
- VA loan program: A loan backed by the U.S. Department of Veteran Affairs that allows no down payment for military personnel, veterans and their families. https://benefits.va.gov/homeloans/
- Good Neighbor Next Door buyer aid program: A HUD program that provides housing aid for law enforcement officers, firefighters, emergency medical technicians and teachers. https://www.hud.gov/program_offices/housing/sfh/reo/goodn/particip
- Fannie Mae or Freddie Mac loan program: Conventional loans backed by Fannie Mae or Freddie Mac require 3 percent down. Good for those with strong credit.
- HomePath ReadyBuyer Program: A program that provides 3 percent in closing cost assistance to first-time buyers. Must complete an educational course and buy a foreclosed Fannie Mae property.
- Energy-efficient mortgage program: Backed by FHA or VA loan programs and allows borrowers to combine the cost of energy-efficient upgrades onto a primary loan upfront.
- FHA Section 203(k) loan program: Borrow the funds needed to pay for home improvement projects and roll the costs into one FHA loan with your primary mortgage.
For daily information about mortgage rates, check out this site http://www.mortgagenewsdaily.com/
Currently, mortgage rates are super low and prices are still affordable so you can purchase a home in the Bozeman area. Read more here about how Bozeman fared during and after the Covid closures. https://movemetomontana.com/2020/06/15/bozeman-real-estate-rebounds-after-covid-closures
Tipped employees, this is your time to purchase a home in Bozeman! Please reach out and schedule a consultation and start the process today!!
Billings ranked No. 4 on Realtor.com and the Wall Street Journal’s latest Emerging Housing Markets index. They looked at metrics for housing market, economic vitality, and quality of life to come up with the list of cities that have great lifestyle amenities and are also