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Knowledge Kick

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  1. Banks allow you to count depreciation back in to the income but thats about it - Using the numbers provided you would be looking at her income of $25k Plus the average of the two years 1099 income so $35k and $55k divided by 2 For you it would be 45k plus her 25k total 70k It sounds like you have left the w2 employer? If thats the case that income will not be used when calculating the income If you file you'll go with the average of the 12-13 taxes there is a quirk to the guidelines - if you show less income in 2013 than the 55k you made in 2012 - they will use the income reported for 2013 How much are you hoping to buy? Have you started looking at homes Brian Thanks for the reply. Yes, I left the employer that I worked for until April 2013. My situation is...I built the company slowly while in college and still worked on it at night, after work. I left my full time job because I was doing well at it and my income through the business was actually a little bit more than it would have been as my salary at the previous job. Of course, that income is a lot less when you calculate in all the expenses. I realize that, but most of the money was spent so that I can earn more income going forward, rather than being traditional expenses like a light bill that are gone and I'll never get back. The expenses include things like software, intellectual property, different website domain names, etc. In other words, I could have pocketed most of the income and it would be approximately $55,000-$60,000 in 8 months. However, it would be bad business because it would be slowing growth and actually delaying the increased cash flow that will result from those expenses. To the mortgage lender, sitting on the income would probably look better, but when you look at the situation a little bit subjectively, it makes sense. Am I wrong here? If so, I don't mind someone telling me. The job I left was actually at an investment bank, so I'm familiar with loan terms, credit default risk, etc. Even with the basic knowledge, though, I don't know the ins and outs of an actual mortgage approval as much as I'd like to. We were looking in the general price range of $179,000-$259,000 between the two of us. It would be in NJ, southern NJ, suburbs of Philadelphia. As previously stated, FICO scores are pretty decent, high 600s to low 700s. We both have car loans and a little bit of debt, but lower than a lot of people. My school loans that are owed are less than $20k and hers are maybe $10k. What sort of shape am I in, based on that price range? Do I have options here? I haven't filed my 2013 yet, but I did play with the numbers and in order to show a higher income, I'd be paying the IRS a lot of cash because I'd be leaving off deductions. That just seems to go against common sense for me and I think it would be bad business. With that said, we're really anxious to get approved for this mortgage and to move out of our current situation. Rates are good right now and that's just an extra motivation, since we want to handle this right now anyway. I really just want to make the best decision possible, so I appreciate any help and advice I can receive from the forum.
  2. Hi all and thank you in advance for your help. My girlfriend and I are in the middle of trying to get approved for our first mortgage. So far, I was told to send in our tax returns from the previous two years, because they'd likely take the average of the most recent two years to determine the level of income. In my girlfriend's case, her income is pretty consistent and about the same for 2011, 2012 and 2013. In my case, I have my taxes basically finished, but I didn't officially file with the IRS yet because of the mortgage process. I'm trying to get some information and advice before I file because once I file, they'd be using 2012 and 2013, since those would be the two most recent. Anyway, my income in 2011 and 2012 isn't much. In 2013, the amount of income that I earned was a lot more than the previous year, BUT I invested a lot of the income I received back into the business. I left my job in April 2013 (have W2 for that) and have a 1099k for the business income received. The thing is...when I go through and enter in all of my deductions, it brings my Adjusted Gross Income way down. Obviously, I would like to take the deductions, because if I don't, I owe the IRS bunch of money. Most of the money spent was on stuff that will eventually help me make more money, such as software, computer equipment, etc. Do the mortgage companies (in general) take this stuff into consideration? I know that technically my income will be a lot lower after all the deductions, but I'm hoping that they will realize these expenditures were made for a reason and not just money wasted. I probably should have waited on certain things (until early 2014, instead of late 2013) but it was important for me to keep the business first. I really hope I didn't shoot myself in the foot and screw up our mortgage chances. What do you think? It's not an overwhelming amount, but I think it would certainly be the difference between getting financing and being turned down. She's at about $25k per year consistently and my income in 2012 was only about $35k. In 2013, I made about $25k on my W2 before leaving, then earned about $55k through the business. I reinvested almost everything that I made back into the business. This income difference of $25k vs $75k for 2013 seems huge to me and I'm not sure what to do at all. We don't have much time on our lease and really want to get rolling with the mortgage, so we aren't stuck with signing another lease. Any suggestions for me? I'm confident that my 2014 will be great and much improved, but I would really like to avoid waiting another year to do this again. Both of our credit scores are pretty good. We're in our mid-twenties and FICOs range from high 600's to low 700's with no major delinquencies. Advice please?! Thanks so much!!!
  3. I need some help on a few different things. Specifically I am looking for recommendations on specific cards to apply for and which "backdoor" numbers I should call, if things don't go my way initially. I will supply as much info as possible, so I can get some good answers and act right away. I have been trying to fix my credit forever. I wrote countless letters for years and was semi-successful. I got some stuff removed and resolved to let some stuff fall off naturally. Should be gone in the next year or so. I would REALLY appreciate it if a few of you guys would lay a step by step gameplan out for me and tell me what you would do if you were me. Here is my situation... A) My score on Credit Karma is only 624. However, almost all of my negative stuff should fall soon. More details on that to follow. B_) My income has recently increased pretty significantly. I was broke for a while, so my credit decisions were pretty poor when I was young. However, it has gotten much, much better in the last 2 years. For about 1 year, I was working as a financial analyst for one of these big banks. My income improved (still not great) and my overall financial situation got better, so my credit got better because of me being more responsible. NOW, I have recently scaled up my own business and left my analyst position. My income has gotten significantly better and I can provide proof to the lenders of $40k+ booked in business just in the last 3.5 months. About $25k of that has been paid already (with proof) and about $15k of it is booked business that I am waiting for payment on. I don't have a tax return with this higher income yet, but I could provide statements, etc. C) I keep getting pre-approved offers and then when I apply...I get denied. What is the reason for this? This happened to me twice in the past 2 weeks for First National American Express and Bank of America Cash Rewards Visa Signature. Should I call backdoor numbers for these and ask to be reconsidered? I think the letter for the American Express one even said no limit. (It should be noted that I had a paid charge-off with Amex back in like 2007. I don't think they even included that as one of the reasons for the denial though. Maybe because the denial came from First National and not Amex? D) What other things should I mention if/when calling? My savings and checking accounts are at Chase. I would like a Chase card. I especially want a Chase card in the Business' name, but I know that's really difficult to get. If you could help with that, I would be ecstatic. Here is all my relevant info courtesy of Credit Karma...PLEASE HELP AND GIVE ADVICE! My Current Cards and Limits I'm really sick of these BS cards with tiny limits that never increase. I was happy to get them a few years ago and very grateful while trying to repair my credit and get a second chance. However, most of them have annual fees, terrible limits and rates, etc. 1) Capital One Visa ($500 limit) I have had this limit FOREVER. They will not increase it. 2) Capital One MasterCard ($500 limit) This card is actually suspended but active. They closed it when I owed money before. I paid the balance to $0, but they still won't reactivate it. It reports $0 balance $500 limit still, which is good.) 3) Orchard (Now Capital One) Visa ($420 limit) 4) Orchard (Now Capital One) Mastercard ($300 limit) 5) Bryant State Bank "Show" Mastercard ($300 limit) 6) First Savings Bank Mastercard ($400 limit) 7) First National Bank "Legacy" Visa ($550 limit) 8) Credit One Bank Visa ($775 limit) 9) First Premier "Aventium" Mastercard ($300 limit) 10) First Premier "Platinum" Mastercard ($300 limit) Total Credit Card Limit = $3,845 Credit Karma Details 624 Credit Rating: POOR Open Credit Utilization 6% Grade: A (I always keep this low.) Payments Made On-Time 97.9% Grade: D (Before it was very bad, now it's very good.) Avg. Age of Open Credit Lines 2 Yrs 6 Mos: D (I'm 26, so my oldest accounts are a lot older than this, but most of my accounts are newer and bring the average down.) Total Accounts 37 Grade: A (I'm glad this is an A but it's sort of artificial. A lot of the accounts are the same things broken up or renamed (like school loans in different amounts. Still happy.) Hard Credit Inquiries 13 Grade: F (Not sure why so high. I don't apply like crazy anymore. It was 15 in May and had 2 fall off since.) Derogatory Marks 0 Grade: A (Happy, but surprised it's 0. I have a lot of charge-offs that I am waiting to fall off.) Loans = $40k About $15k in auto loan and $25k in schools loans. Payment history is perfect on all. I would like to get a mortgage in about a year. Negative Accounts As per Experian 03-18-13 (can't get a newer one for free yet) 1) American Express Balance = $0 Charge off as of 08/2007 "on record until May 2014" 2) Capital One Balance = $0 Charge off "on record until Sep 2014" 3) HSBC Balance = $0 Charge off "charge off 07/2008 disputed on 10/2010" 4) Home Depot / Citibank Balance = $0 Charge off "on record until Oct 2014" *I also have a handful of accounts listed as negative accounts that are open credit cards with low or $0 balances. I guess I had them and was late on a payment or two in the past. Can I get these removed? Who should I talk to? ANYWAY...that's my story. Can I somehow leverage my now higher income and get Credit Limit Increases or BETTER cards? Who should I call? What should I apply for? PLEASE HELP!!! THANK YOU IN ADVANCE!!!
  4. $1,000 and some change. Again, not life altering...but I don't want to pay it if I don't have to...at all.
  5. I'll challenge the thing officially with HR, because even if it doesn't help...it at least doesn't hurt. As far as the amount goes, it's in between $500 and $10,000. Definitely not something I just want to give up though. Any additional insight?
  6. Hi All, I received a notice of overpayment from my previous employer. The employer is actually an extremely large bank, so collecting on debts is something they due already. I am listing this in case it's relevant at all. The letter states that I was overpaid (upon leaving) as a result of "overpaid regular hours" and "overpaid vacation time that was unaccrued". They then request that I remit payment by a certain date, in about 2 weeks. The problem with this is, I sincerely do not believe I was overpaid. In fact, prior to leaving, I saved certain emails related to this exactly. I knew I was leaving, so I made sure I looked this type of thing up, before I ultimately left. At one point, my hours were assigned incorrectly in the payroll system. The amount of hours wasn't wrong, but it was coded incorrectly and made my "vacation time available" decrease. I emailed my boss about this, but we couldn't change it at that point. I saved the emails, but I'm not sure how helpful or convincing they'd really be. Also, I still think I can sick days, etc. that would have covered this period of "overpayment". Anyway... 1) Does anything I just said about not really being overpaid (in my opinion) matter at all? I have a strong feeling that if they say I was overpaid, that's all that matters and I can't do anything about that. 2) If I formally contact them, call HR, etc. does this do anything to protect me? In other words, will they not put this on my credit report if I officially challenge it before the date listed? I will write them a letter and/or call them, letting them know that I disagree. Will this have any benefit? 3) What happens if I don't pay it? Can they take the funds directly out of my checking account without my permission? The checking account I have is actually owned by the same bank (employer). Should I put my money in a different checking account just in case? I just want to know if they can only pursue the money like a credit card company (send letters, call, etc.) OR if they can take the money directly, without my permission, sort of like the government can. 4) If I refuse to pay...how long until it appears on my credit report? What does it appear on the report as? Will it affect my score in a significant way? More than a credit card charge-off, for example? I want to weigh my options here. Should I bite the bullet and pay even though I feel they are incorrect? Should I stand strong, because the downside isn't even all that bad? PLEASE TELL ME MY OPTIONS!!! Thanks!
  7. I really need to establish credit in the name of my business. Please tell if I can be approved for anything at this point, or what my chances are. I started an LLC in 2009. This was in college, and part time, so the business never had any significant revenue. However, I recently scaled everything up, full time, and have been successful. I'm now at the point where the business is at $10,000-$15,000 per month in revenue. The history of this increased revenue is only a few months old right now, so it's not reflected on any tax returns yet. Now that my expenses per month are in the thousands, it would be really nice to get some credit for this using a business credit card. My personal credit isn't awful, but not great either. The last two FICO scores I received were 620 from BMW in December 2012 and 615 from American Express in February 2013. Based on my personal credit and the business revenue, will I be approved for any business credit if I apply right now? If so, where should I apply? This means a lot to me and I really appreciate the help. Thanks, Steve
  8. So instead of waiting for them to take these amounts out of my state tax returns, should I just negotiate a reduced payment with the collection agencies? Will they settle for a less than full amount? I rather pay $800 of the $1,500 and have it be done with then getting $1,500 taken out of my state tax return without notice.
  9. One school is a local, country college. The other is a small, public university. The Pell Grant was awarded to me at the county college but then rescinded later because I maximized the grant at my University. So, I don't owe money to the government, but I do owe money to the college. It is now an outstanding tuition payment because of the Pell grant being taken back. I know they obviously want the money, because I was contacted by a debt collector asking for it. I just want to know what they can do to me, aside from withholding my transcripts and not letting me register for classes, neither of which concern me. I am only concerned about it showing up on my credit report or being taken from me via income taxes. Are these likely to happen?
  10. That's what I assumed too. However, I have received letters from collection agencies for both of these schools. I know that I never need transcripts from either school and will never attend either in the future. My only concern is my credit report. Will my credit be affected? Can they take the money from my state tax return for the debts owed?
  11. Can debts owed to a school for tuition show up on your credit report? I'm not talking about student loans through the school or through a bank or the government. What happened was...back in 2005 I received a scholarship from a school. I went there for a brief stint before withdrawing from classes. Upon withdrawing, I lost my scholarship and the classes that were covered by the scholarship were no longer paid for and became a balance owed to the school. My question is, does this balance have a chance of affecting my credit in the future if I do not pay it? I have been in college (at another school) since then, so I have not worried about it because debt collectors tend not to bother you for education debts while you're a full time student. The balance owed for that particular school is about $1,500. I also had a similar situation last summer. I attended a local, county college to take 1 class over the summer. They didn't make me pay upon registration because a Pell grant was in place. I took the class and completed it, receiving course credit at my University. Turns out, the full Pell grant was applied to my tuition costs at the university. I had already transfered the credits to my school. Normally, the county college won't give you any of your info or transfer your credits until they're paid. I had already transfered the credits over though, so I had no incentive to pay them yet (they gave me my transfer letter because they thought they were paid by Pell). This is about $1,000. So I have 2 separate cases here. The original school in 2005 ($1,500 owed to them) and the county college last summer ($1,000 owed to them). Will these ever show up on my credit report? They usually control the situation by telling you that you can't get your grades or register for classes until they're paid. I don't ever need to go back there though and I have all my info already. I'm in good standing with my university. I graduated in May and don't owe them a balance (only Federal loans). Should I be worried about this? I have an old letter from 2006 from a debt collector for the first school, haven't heard from them since. I just got a letter from a debt collector for the county school. What do you think?
  12. Then they're not accurate. But when I tell them about the inaccuracies, they just fix them and don't remove anything lol
  13. Are they worth trying even though the negative tradelines are valid and accurate?
  14. They're accurate. Sometimes a date is off or something, but they're accurate. I just want them gone. If they won't even take my money to remove them then I doubt anything will work.

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