[kahnefan9]

Recently my husband became an independent contractor for his previous employer and is making double what he used to make. We have been saving up money for our first home and decided that now maybe now is the time. We are nervous because 5 years ago we were put through two lay-offs back to back and it was either have good credit or use the money we had to feed our kids. Our credit suffered during that time. My credit score is about 660 and my husbands is 630. We have an appointment with a mortgage officer next week but I am really nervous that we are wasting her time. Can we qualify with low credit scores?

[NowWhat]

You would probably qualify for a mortgage loan with these scores - the interest rate may be higher or you might have to do an adjustable rate mortgage.
Something you might want to find out about is this - if your husband is self-employed - a lot of companies require 2 years worth of tax returns that he has been self-employed.

[Fr_Chuck]

Yes you should quality,

You do understand the tax situation with the independent contractor status. When I heard you say he is "making double"
You do understand that you will be paying about 40 percent of his pay in taxes most likely, and I would assume you are filing quarterly estimated taxes so you won't have any tax penalties.

As a independent contractor, a 1099 worker, he has to pay full state and federal taxes, since there is no withholdings from the employor, and also the full 15 percent self employment tax ( social security tax)
He will of course have some tax deductions that will help, but I have seen person, after person, end up oweing the IRS 1000's and 1000's of dollars here at tax time every year, not knowing they will have to pay full taxes on this money.

[kahnefan9]

Yes you should quality,

You do understand the tax situation with the independent contractor status. When I heard you say he is "making double"
You do understand that you will be paying about 40 percent of his pay in taxes most likely, and I would assume you are filing quarterly estimated taxes so you won't have any tax penalties.

As a independent contractor, a 1099 worker, he has to pay full state and federal taxes, since there is no withholdings from the employor, and also the full 15 percent self employment tax ( social security tax)
He will of course have some tax deductions that will help, but I have seen person, after person, end up oweing the IRS 1000's and 1000's of dollars here at tax time every year, not knowing they will have to pay full taxes on this money.

Thanks for the help :)

When I say double that is after taxes (fed and state), paying for our own insurance and putting away for retirement. I should have said we have twice the amount of monthly income to purchase things with, apply to a mortgage or go on vacation with.

FR Chuck ~ We live in the same area :)

[Fr_Chuck]

Ok, thanks, just did not want you to end up getting into trouble on this.
I know it was not part of your question, but I am glad it is working out, wish my job was, my place closed and some other states went independent contractor, but our state they just closed operations completely.