Buying a house
 

Sorry if this is in he wrong forum but I didn't know where to put it. So anyway, has anyone here baught a house while just being a professional poker player? If I put 40-50% down and show bank statements will they care I don't have a "real" job? Anyone have any expierience with this?

Re: Buying a house
 

bump.

ive been thinking about this for a long time myself and dont know the answer.

Re: Buying a house
 

Im not American, but you can loans against assets even if you have no income (on paper) but you may be looking at a slightly higher rate of interest.

Id be interested to hear who people have got there finance through in the US!

Re: Buying a house
 

You can get a non verification mortgage as long as you are willing to put more money down and are willing to pay a higher interest rate. If your credit is perfect,and with the 40% you are looking to put down, you should have no problem. Talk to a good mortgage broker in your area.

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If you are willing to put 40% down you should be able to get a mortgage with just your credit score. Here is a link from a radio program that is on every Sunday in Detroit:

https://www.rockfinancial.com/home-l....html?lid=1682

Re: Buying a house
 

No doc is the way to go, and if your credit is 750ish or higher, you can get away with 10% down; right now it's silly not to leverage the mortgage since money is cheap and you'll want to maximize your tax deductions.

Unless you have a 3 year+ audited history (with tax returns) of 6-figure income from poker, telling a bank you're a "poker pro" is pretty much suicide - you might as well tell them you're a professional casino patron. Even with the history, I'd probably bull$hit them and make it look like it's derived from a legitimate internet business; but I digress.

Buy the house, you won't regret it.

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right now it's silly not to leverage the mortgage since money is cheap and you'll want to maximize your tax deductions.


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I'm certainly no expert, but I think this is bad advice for most people.

Re: Buying a house
 

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Even with the history, I'd probably bull$hit them and make it look like it's derived from a legitimate internet business; but I digress.


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However, before you start down this road, be certain you are damn sure exactly what is and is not considered fraud.

I would suggest asking a lawyer for clarification, but they would probably tell you that BSing to get a loan of several hundred thousand dollars is a little bit insane.

Re: Buying a house
 

being a professional gambler, you're technically self-employed. in order to use self-employment as your "job" most lenders require you to give them 2 years tax returns showing how much you make.

if you haven't been doing it for two years, then there are a couple of other things. you can do a stated income (they verify your assets, but not income) or no doc (they don't verify anything except credit score). you have to have good (700+) credit to qualify for both of these and they both typically have a bump in the rate.

countrywide has one program for 700+ credit scores called the "fast and easy" where everything is based off of your score and, i think, the rate is actually a little lower.

my suggestion would be to talk to a mortgage broker (not a bank or mortgage company) because they have access to a lot of different lenders and programs and will probably know what you'd need to do based on your credit score.

my girlfriend was a loan officer until last week, so we've talked all about this sort of stuff. feel free to PM me with more specific questions...if i don't know the answer, i'm sure she will...

Re: Buying a house
 

Allow me to clarify:

a) By leveraging the mortgage I mean within the confines of your budget; i.e. even if you have a pile of $500,000 cash and intend to buy a similarly priced house, there are advantages to mortgaging it at 10% down versus 50%, or paying cash outright.

b) As far as misrepresenting the source of your income, there is a less than 1% chance the IRS or a bank will verify that an Ecash transaction into your checking account came from online gambling versus whatever you claim. The former frankly doesn't care as long as you pay your tax obligations; the latter cares since it's a credit risk.

It's all moot anyway; right now the spread between doc and no-doc loans is not significant if your credit is high, so there's no need to divulge the above. All I'm trying to say is if you do have verifiable income going back 3 years, as much as you try to legitimize "poker income" the bank likely will not differentiate you from a slot machine player. Go no doc, end of story.

Consult your attorney is always good advice, of course.

Re: Buying a house
 

baught?

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baught?

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is this necessary? no i do not believe it is.

Re: Buying a house
 

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baught?

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is this necessary? no i do not believe it is.

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It is. It provides necessary information about OP that will better allow us to gauge his ability to understand and apply various pieces of advice given in this thread.

Freakin

Re: Buying a house
 

Welllll.... I can tell you that when I bought a house (WITH a regular day job), the process included me presenting a current pay stub and three years of tax returns. Yes, they phoned my employer's HR department, and verified how long I had worked there and that my employment was expected to continue.

In general, the more you put down and the higher your interest rate, the easier it is to get a loan. I would not be surprised if you get turned down a time or three.

Also in general - DO put down at least 20% even if you can get a loan without doing so. Mortgage insurace is a huge unnecessary dent in your paycheck, and paying off the first 20% of your mortgage to avoid it is right behind paying your credit cards off as far as +EV financial decisions go.

There are upsides to mortgaging the remaining 80% of the house and investing your spare money elsewhere especially if you are very rich or it's a very expensive house. But if you're buying a house worth under 200k like us mere mortals, there is no gain from the interest deduction, and if you have any trouble with the bank, I would seriously consider saving up another year's worth of winnings and buying a small house outright.

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This is poor advice imho, I have many friends that are older than I and have more funds(way more), when I "baught" my first house(2nd property), they all told me the same thing, buy the biggest you can afford. The cheapass that Iam went down a little in price so that I could safely make extra payments every month(i'm anal like that), which I do. If I had spent a little more on the house I would have a bigger house worth more and 3 years later now, Id have more equity and the difference in the payment was minimal(I'm making about the same payment anyway).

In a few years youll be glad you got sommething worth a little more, its not like a car wheer it is worth less every year, as the real estate market grows, and it does everywhere, your value will too.

BTW, where are you looking to buy?

tobdog

*These are my opinions, not those expressed by 2+2 or any of their affiliates, sponsors, etc. Tobdog inc. investments carry market risk and you should connsult with your finantial advisor as well as your tax advisor before making any investment that may be at risk of lisong value due to market volitality.

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if you are thinking of putting anywhere close to 40-50% of a downpayment on a house, you need to do some reading on the subject before you worry about what a bank is goign to think.

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I recently bought my first home 7 months ago, I have had nothing but poker income for the past 30 months, and my credit score was not all that good. I feared the worst.

I had absolutely no trouble purchasing a 200k home with 10% down and a sub 700 credit report on a No Doc loan. The only thing I had to do was get a CPA to verify that I am self-employed. I did not disguise what I do for a living in any way, and it went smooth as silk.

Re: Buying a house
 

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I recently bought my first home 7 months ago, I have had nothing but poker income for the past 30 months, and my credit score was not all that good. I feared the worst.

I had absolutely no trouble purchasing a 200k home with 10% down and a sub 700 credit report on a No Doc loan. The only thing I had to do was get a CPA to verify that I am self-employed. I did not disguise what I do for a living in any way, and it went smooth as silk.

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Agreed. If you've got 10% down and a good credit score, you could be an assistant crack whore and they'd give you a loan.

I was "approved" for my first home loan while I was still unemployed. But I did hold off on buying until I got a job and was able to get a better rate and a bigger house.

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This is poor advice imho, I have many friends that are older than I and have more funds(way more), when I "baught" my first house(2nd property), they all told me the same thing, buy the biggest you can afford.

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That's what mortgage brokers and realtors tell everyone, shouldn't be hard to figure out why.

Better advice, IMO, is to buy a more resonable house that suits your needs, and pay it off way early. Then you take your former mortgage payment and invest it in whatever.

And don't give me tax deductible interest blah blah, why would I want to pay 10K in interest to save 3K in taxes?

Debt = risk.

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Better advice, IMO, is to buy a more resonable house that suits your needs, and pay it off way early. Then you take your former mortgage payment and invest it in whatever.

think about what you typed. then think about it some more. then think about what the stock market generally returns if you are long term investor. then think about what a typical mortgage interest rate is. then tell me again why paying your mortgage off early is smart?

Re: Buying a house
 

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This is poor advice imho, I have many friends that are older than I and have more funds(way more), when I "baught" my first house(2nd property), they all told me the same thing, buy the biggest you can afford.

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That's what mortgage brokers and realtors tell everyone, shouldn't be hard to figure out why.

Better advice, IMO, is to buy a more resonable house that suits your needs, and pay it off way early. Then you take your former mortgage payment and invest it in whatever.

And don't give me tax deductible interest blah blah, why would I want to pay 10K in interest to save 3K in taxes?

Debt = risk.

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My understanding is that ALL of the interest on a mortgage is tax deductible.

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Better advice, IMO, is to buy a more resonable house that suits your needs, and pay it off way early. Then you take your former mortgage payment and invest it in whatever.

think about what you typed. then think about it some more. then think about what the stock market generally returns if you are long term investor. then think about what a typical mortgage interest rate is. then tell me again why paying your mortgage off early is smart?

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For some people it's a huge psychological burden lifted off their shoulders. Also, a lot of people don't expect the market to return as much as the past average over the course of the next few decades.

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My understanding is that ALL of the interest on a mortgage is tax deductible.

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It is. It's a *deduction* not a credit. If you pay $10k in interest, that means you *deduct* $10k from your income used to figure your taxes. Not deduct $10k from your tax bill.

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All of the interest IS tax deductible. Say you make $50,000 and can deduct $10K in interest charges. In that case, you only pay taxes on $40K, instead of $50K, which would be about $3,000 less.

You don't get to pay $10K less in taxes if that's what your thinking.

Re: Buying a house
 

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think about what you typed. then think about it some more. then think about what the stock market generally returns if you are long term investor. then think about what a typical mortgage interest rate is. then tell me again why paying your mortgage off early is smart?

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No need for the insulting tone, I understand all that. It's all about your risk tolerence level I guess. Debt = risk.

If my mortgage rate is 5%, and I can get 8-9% from mutual funds (Don't tell me about the 20% returns you got in the last week, i invest for the long term) The 3% extra I get for those few years is worth less to ME that the peace of mind and awesome cash flow I can get from living in a paid off home. YMMV.

I'm not talking about 15 years, I'm talking about paying it off in 7 or 8. That's the beauty of not buying "the biggest house you can possibly afford"

If your portfolio is so huge that the 3% extra over 8 years comes out to a huge amount, I see your point.

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didnt mean to come across as insulting [img]/images/graemlins/frown.gif[/img]

sorry bout that.

you are also forgetting about the other benefits. such as tax deductions on your loan, the fcat that your house is growing in value, while the bank actually owns most of it etc....

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ALL of the interest on a mortgage is tax deductible

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DING! DING!

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you are also forgetting about the other benefits. such as tax deductions on your loan, the fcat that your house is growing in value, while the bank actually owns most of it etc....

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This is not the always the case, things could decrease in value. It's my opinon that the housing market is going to 'correct' itself in the next few years.

Re: Buying a house
 

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This is not the always the case, things could decrease in value. It's my opinon that the housing market is going to 'correct' itself in the next few years.

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I think this is a simple generalization that can't accurately be made. So I don't sound like an egotistical jackass, I had the same opinion three years ago. Problem now is when that correction comes, it will set you back maybe a year or two, and those who made purchases back then will still be better off than a bargain hunter waiting for the "collapse."

While regional real estate markets will suffer (i.e., I wouldn't touch Palo Alto or any waterfront property in Palm Beach), demographics in other areas such as metro-NY/NJ suburbs dictate demand for housing will remain strong despite external factors such as rising interest rates.

Many years of trying to outmaneuver stock markets, bonds, and real estate have taught me that asset/market timing is futile versus the benefits of getting in and realizing the value of compounding at an early age with a long time horizon.

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The wife and I quit our jobs, sold our office and house, moved to MN and bought a house with no job and 10% down. No problem if you've got good credit.

Re: Buying a house
 

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My understanding is that ALL of the interest on a mortgage is tax deductible.

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Your interest on income property is not, but for your residence it is with someone told me there are a few exceptions, but hardly ever occurs. I look at the tax-deductable interest and property tax as getting a discount, because your still paying it, you just get to deduct it (what you pay) from your income, it makes your house lie getting a discount on rent, we all have to pay to live somewhere, my house payment is less than the average rent in my county for a 2 bedroom apartment.

Remember, the government never gives anything away for free, where do you think they got it in the first place, they stole it from the Russians when they weren't looking? NO, the US taxpayers paid for it in the first place.

And purchasing has one additional benefit, I have a fixed rate loan, except for a marginal tax increase(California has a capped growth rate) I know what my payment will be 25 years from now, renters dont have that luxury.

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I think this is a simple generalization that can't accurately be made. So I don't sound like an egotistical jackass, I had the same opinion three years ago. Problem now is when that correction comes, it will set you back maybe a year or two, and those who made purchases back then will still be better off than a bargain hunter waiting for the "collapse."

While regional real estate markets will suffer (i.e., I wouldn't touch Palo Alto or any waterfront property in Palm Beach), demographics in other areas such as metro-NY/NJ suburbs dictate demand for housing will remain strong despite external factors such as rising interest rates.

Many years of trying to outmaneuver stock markets, bonds, and real estate have taught me that asset/market timing is futile versus the benefits of getting in and realizing the value of compounding at an early age with a long time horizon.

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Wow... that went right over my head, but it sounds awesome.

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In addition, when the real estate market has a "downturn," historically prices have not fallen much. Instead, volatility suffers. This is an interesting yet logical concept. If your home falls from $200k to $100k, you aren't going to sell it. You'll simply wait for a better price, especially since you're still gaining value from its use as a residence. Out of 37 years of data on median prices of existing homes, prices only declined outright in 3 quarters. Outright drops in numer of sales were much more frequent and larger in quantity. The most striking example of this was the early 80's. Interest rates soared, incomes were stagnant, and the housing affordability index dropped below 100. Yet housing prices trended upward slightly. Volume, however, dropped 55% from 1978 to 1982.

Houses aren't like cars or appliances or other durable goods. Homeowners can simply wait, for the most part. There are always exceptions, such as someone being transferred to a different city, but those are just that: exceptions. All this talk of a real estate "bubble burst" is largely nonsense.

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you are also forgetting about the other benefits. such as tax deductions on your loan, the fcat that your house is growing in value, while the bank actually owns most of it etc....

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I'm with you on that, leverage can be a powerful thing. But look at it this way: If you were sitting in a paid for house, would you borrow against it to invest in the stock market? That's in effect what you're doing by not paying on the mortgage.

Maybe you would, many with a high risk toleraence have done it. But it's not for me. It's not a black and white issue, financial experts debate this like we debate raising AJo UTG [img]/images/graemlins/tongue.gif[/img]

As far as tax advantage to having a mortgage goes, it's nice, but it's not a reason to keep a mortgage if you have the means to pay it off. The math doesn't work. I have to pay 10K in interest to save 3K in taxes. I'll let Uncle Sam have his 3K and I'll pocket the other 7K. [img]/images/graemlins/smile.gif[/img]

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Yeah get the no doc loan. My poker playing friend just bought a house with that deal, I think he put 20% down and has a very low variable interest rate, like 5% or something. You don't need to prove your income if you go no doc, so don't worry about trying to make it look like somethin else. They don't ask for documents, they just look at your credit score.