Buying My First Home on a Writer’s Income

Is it impossible? Let’s see.

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So, the picture you see above is similar to what I am looking for — a small condo located on the coast of South Carolina. The prices aren’t too terribly bad on the ones I am looking at, and, of course, they are less “updated” than what you see in the picture — but on a writer’s income? Is that even possible? What about being self-employed? Am I totally crazy for wanting to buy my first home like this?

Well folks, it won’t be easy. But at my age — renting forever, and at current rental prices, it’s a bleak situation.

Let’s take a look at the back story — quickly — then at some of the challenges we writers face when trying to get a mortgage.

The Nutshell Backstory (I tried to keep it brief)

My childhood home was a cheap rental in a pretty terrible neighborhood. My parents worked hard and dreamed out loud of buying a home. I grew up in a family of 7 in a 2 bedroom/1 bath home that was less than 1K square feet. It was a modest childhood, but a pretty good one in spite of our challenges. But, I grew up dreaming of the day when a home would be ours.
I bought one home when I was married but my name wasn’t on that deed since I was a self-employed hairdresser. When the marriage crumbled the bank took my home and gave me and my kids 30 days to get out. We were devastated.
I almost managed to buy a home 3 years ago but it would have been a repeat with my name not being on that loan. Again, that relationship ended, all my money was gone, and I temporarily gave up on trying to find my forever home.
Moved in with my mother (at the ripe age of my mid 40s), saved up for a few months and got myself an apartment.
Lived there less than a full year — at the apt. complex there were 2 shootings and 3 attempted sexual assaults, numerous calls to the cops, and a few car break ins. It felt like living in chaos.
Moved in with my brother with the sole purposes of getting to safety and having one full year here to save up and prepare for my first home buy. Then, the time frame changed — I now have until October. I need to be out of here by October and into another rental property (Oh, God, please NO.) or I need to get a mortgage approval NOW and find the right property.
I know exactly what I want and where I want it — I am working to find a lender that will work with me.

Now we’re all caught up.

All my life I have been trying to be homeowner. I’ve tried all the wrong things with the wrong people….when I should have been believing in myself and counting on myself and doing it on my own. This time, it’s just me. Just me and my writing. And this time — I have no one to blame but myself if this whole thing goes south — again.

The Current Writing Situation

The writing situation, meaning my writing and editing business, is not bad. I am regularly making 3500–4K per month with my writing work and this is my only income. I have retainers in place with regular clients and more clients approaching me fairly regularly so I feel the business is doing very well to be so young. I also have a novel in the wings I am working hard to query, so there’s that.

This is plenty income for the types of properties I am looking at. Maybe not enough to clear away those college loans — but enough to secure more stable living conditions.

The Current Living Situation

As I explained before, I am living with a family member until October. This allows me some time to save up for a downpayment but not a lot of time to save up + find a place + close on said place + move. The time crunch is real.

So, can it be done? A mortgage on a writer’s salary? With no W2’s to speak of and a complicated tax profile?

The answer is yes. It can be done.

What Is Needed to Get a Mortgage When You Are a Self-Employed Writer?

To get a mortgage when you are self-employed, the process is a little more complex than simply getting your credit score, debt-to-income-ratio, and check stubs prepared.

You have to be employed in your current business for at least 2 years and have the tax paperwork filed for 2 years. An average of these 2+ years is taken to show income. The lender may also ask to see your bank statements or other proof of steady income. Some banks may require 3 years income before they’ll feel comfortable approving you for a loan

You also need your credit score and debt-to-income ratio to fall within the right parameters for the loan.

Then, you need the required down payment. In my case, I would prefer a loan that comes with down payment assistance — and I am learning as I work with lenders that these loans are not available to me, or they are available and they don’t cover certain types of properties (like mobile homes which are in my price range)or properties anywhere near where I want to live (because USDA loans have to be in rural areas where I will have a harder time finding the steady internet I need to be a remote worker).

So, the loans I am looking at are FHA and what’s called a “bank statement loan.” Bank statement loans are a more creative lending option that are hard to find — and come at a price — higher interest rates.

Both require me to have at least 5% of the purchase price of the home as a downpayment.

Rrr-uh rr-oh.

Houston, we have a problem.

So, Can it Be Done?

Saving a downpayment will be nearly impossible, but I have accomplished great things in the 2 years since I started my writing business. I got an apartment. I bought furniture to fill said apartment, kitchen gadgets, dishes, pet supplies, bathroom stuff like towels and the like. I bought a car. I took business trip to the beach to write. I moved twice. I paid nearly 3K to save my dog this past January. I made it all happen above and beyond my bill money. So, surely, with help of cheap subletting with a family member — surely, surely I can make this happen?

I’ll have to take on new clients and work twice as hard. I may have to give up on some of my extra-curricular writing projects. (Like my Patreon which is my heart and soul — unless the membership there triples and then triples again.)

I may have to work 7 days a week. I even shared a 5K goal on my Kofi. Every dime matters at this point.

I‘ve already cut spending down to only what is absolutely necessary.

I may have to sell some of my things so I can pay off some other things and get my debt-to-income ratio to a better number. It will make the move easier, anyway, to not have to take all my furniture with me.

I believe that as long as a lender is willing to work with me — I will make this happen. It seems impossible. It seems overwhelming. But I have done big things before. I will do it again.

If you are self-employed and want to be a home owner — don’t give up on your dreams.

It may take you longer to find the right lender, but keep looking because they are out there.
Keep good records. Have 2 years tax paperwork to show your income.
Be ready to supply back-up paperwork to further verify this income.
Get your credit score up.
Get your debt-to-income ratio to a low and reasonable number.
Get a downpayment together (at whatever sacrifices you have to make) and make this happen for yourself!

Thank you all for following my story. It’s been a very tough last couple of years but thanks to all my faithful readers — I am finally moving in the right direction. Peace and love to you all.

UPDATE: I heard back from the leners with a fairly short “hit-list” of things I need to do to be mortgage-ready! I’ll start ticking those things off and preparing my downpayment. Unfortunately, I won’t be ready by October but more like early in 2023. So, I’ll have to rent ONE more year. (Sad face.) BUT — it WILL HAPPEN.