Welcome to the first installment of our new feature, “Ask the Agent” – where your questions are answered by the local real estate guru, Bill Jenkins. Bill has served the Henderson area for 17 years and thus has seen the ups and down of the local market up close. As a father of three active boys, he has a passion for helping families find their dream homes. If you have a question for Bill, email him at teamjenkinslasvegas@gmail.com

Dear Bill,

I began working from home last year, and did well enough to quit my job and focus on my new business. As my home-based business is my only source of income, would I be able to buy a home?

-Meghan in Green Valley

Dear Meghan,

You pose a good question, and one that is on the minds of many people in this economy, as they are turning away from working for larger companies and starting their own businesses. Congratulations on your success!

The first thing you would have to do is understand the qualifications of income and how you have reported your earnings as income and profit. If you are seeking a loan, you will need to establish that you have had a steady income stream for a minimum of two years. In your case, that may mean that you won’t be able to qualify for another year. Lenders are entirely concerned with whether you can make your payments, and will base the loan amount on that figure. Some lenders may want to charge a higher rate than they would an employee, so do shop around. 

Next, much like every other loan, you need to know where your credit rating stands, and the amount of money you have saved for a down payment. As a self-employed person, you may be required to pay a larger down payment to reduce your loan-to-value ratio to a figure that makes the lender feel better.

Begin by working with a skilled agent who has access to several different types of lenders. There are lenders that specialize in government loans such as FHA (Federal Housing Administration) and VA (Veterans Administration). There are also lenders, such as banks, that provide private money - typically known as “conventional loans.” Regardless of the source of your livelihood, you will want to be educated so that you are able to choose the best loan based on what your specific needs are at this time. A seasoned agent will be able to explain the merits of each choice.

Keep doing what you are doing, and keep very good records. You should be happily house hunting very soon!