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Your tax returns show $40,000 income but you deposited $120,000 last year. You’ve been self-employed for 18 months. Your credit score is 680. You want to buy a two-family in Queens and rent one unit.

Chase said no. Wells Fargo said no. Your local credit union said “maybe” then ghosted you.

This is where most first-time buyer stories end. But it’s actually where interesting lending begins.

The Mortgage Market Nobody Talks About

Sal Bossio started in mortgages during COVID’s refinance boom, when anyone with a pulse and a W-2 could get a loan. Now rates are higher, guidelines are stricter, and traditional lenders have become allergic to anything outside their checkbox criteria.

But here’s what changed: alternative lending got sophisticated. According to Inside Mortgage Finance, non-QM originations reached $120 billion in 2024, up from just $25 billion in 2019. Bank statement loans now price just 0.75% above conventional rates. DSCR loans let rental income qualify you. P&L mortgages use your actual business profit, not what’s left after your accountant’s creativity.

When you find a mortgage broker in New York who understands these products, rejection becomes approval. The same file that gets declined everywhere suddenly has five options.

Real Numbers, Real Scenarios

Let’s talk actual deals that closed through The Mortgage Universe:

The Uber Driver: Showed $31,000 on tax returns after mileage deductions. Bank statements showed $75,000 in deposits. Bank statement loan approved at 7.2% for a $450,000 purchase in Long Island.

The Restaurant Owner: Just opened second location, tax returns were a disaster. P&L loan using profit and loss statements, not tax returns. Bought $650,000 home with 15% down.

The Crypto Trader: Massive assets, minimal traditional income. Asset depletion loan qualified him based on investment accounts without liquidating positions. Closed on $1.2M property.

These aren’t unicorns. They’re typical non-QM deals that close every day while traditional banks keep saying no.

Why Banks Actually Say No

Banks don’t hate you. They hate risk. Or rather, they hate risk that doesn’t fit their resale criteria. The Federal Housing Finance Agency oversees Fannie Mae and Freddie Mac, which purchase about 70% of U.S. mortgages. These agencies have rigid guidelines. Step outside them, and banks can’t sell your loan.

A mortgage broker near New York working with portfolio lenders changes everything. These lenders keep loans instead of selling them, so they make their own rules. They can actually look at your situation instead of just running your numbers through an algorithm.

Barrett Financial Group, which powers The Mortgage Universe, connects to lenders who understand that a freelance developer making $150,000 is less risky than a retail manager making $50,000, even if the developer’s tax returns look worse.

The Programs That Actually Work

Bank Statement Loans: Forget tax returns. Use 12-24 months of bank deposits. Perfect for anyone who writes off significant business expenses. The Self-Employed Mortgage Access Coalition reports these loans serve 5.4 million self-employed Americans. Rates typically 0.5-1.5% above conventional.

DSCR (Debt Service Coverage Ratio): The property’s rental income qualifies you, not your personal income. Buy a three-family, live in one unit, rent covers the mortgage. Your job income becomes irrelevant.

Asset Depletion: Have $500,000 in stocks but minimal income? Lenders calculate a fictional monthly income based on your assets. No liquidation required. Freddie Mac’s guidelines allow asset depletion for conventional loans too, though most lenders don’t offer it.

ITIN Loans: No Social Security number? ITIN loans work with Individual Taxpayer Identification Numbers. Same rates as similar credit profiles with SSNs.

Hard Money Bridge Loans: Need to close in 5 days? Hard money gets you the property, then you refinance into better terms once you own it.

The Catch (Because There’s Always a Catch)

Non-QM costs more. Not dramatically, but measurably. Mortgage News Daily tracks rates showing non-QM averaging 0.75-2% above conventional. If conventional rates are 6.5%, expect 7-8% for non-QM. Down payments start at 10%, sometimes 20%. These aren’t subprime predatory loans, but they’re not government-subsidized either.

The math still works. Paying 7.5% interest beats paying rent forever. Building equity at higher interest beats waiting for perfect rates that may never align with your life timing.

Finding the Right Broker

The top mortgage lenders New York first-time buyers need aren’t advertised on billboards. They’re specialty lenders accessed through experienced brokers who know which lender fits which scenario.

Questions that matter:

● How many non-QM lenders do you work with?

● What’s your average approval rate for self-employed borrowers?

● Can you close in 21 days?

● Do you charge upfront application fees? (Run if yes)

The Consumer Financial Protection Bureau recommends comparing at least three brokers and getting all fee agreements in writing.

The Real Timeline

Traditional mortgage: 45-60 days Bank statement loan: 21-30 days DSCR loan: 25-35 days Hard money: 5-10 days

Sal Bossio closed a renovation loan in two weeks. Speed happens when brokers know exactly which lender to approach first.

Next Steps

Stop applying to banks that will reject you. Stop letting realtors refer you to their “preferred lender” who only does conventional loans. Start working with brokers who specialize in making difficult deals work.

The Mortgage Universe doesn’t just search multiple lenders. We search the entire lending universe for solutions banks won’t offer. Available nearly 24/7 because deals don’t wait for business hours.

Purchasing the first house you own is a thrilling experience. Since it’s one of the most important financial decisions you’ll ever make, learning from a mistake can be expensive. Many first-time purchasers are eager to get started but overlook crucial facts, which can lead to unnecessary stress or financial loss.

“The good news?” Most of these mistakes are avoidable. With a little preparation and guidance, you may steer clear of expensive surprises and ensure a more seamless experience. At The Mortgage Universe, we help first-time buyers understand the mortgage process, compare financing options, and feel confident about their purchase.

Let’s examine the most typical first-time buyer errors—and how to steer clear of them.

1. Beginning the Search Without Prior Approval: Searching for a home before being pre-approved is similar to going shopping without knowing how much you have to spend. Pre-approval helps you see exactly how much you can afford and encourages sellers to consider your offer.

Tip: Get pre-approved prior to searching for homes. In this manner, you lower your chance of heartbreak while shopping within the appropriate price range.

2. Ignoring the “Hidden” Cost:In addition to the down payment, there are other expenses. Buyers frequently ignore closing costs, property taxes, homeowner’s insurance, and ongoing maintenance. These can add thousands of dollars to the purchase price.

Tip: Set aside two to five percent of the buying price of the house for closing costs. On a house that costs roughly $300,000, that is an extra $6,000 to $15,000.

3. Ignoring Debt and Credit Score: Your credit score and debt-to-income ratio significantly influence your loan terms. The difference between a higher score and a lower interest rate accumulates over a 30-year period. Before applying, check your credit months. It would be beneficial to reduce your debts, avoid opening new credit cards, and correct any errors on your credit report.

4. Acquiring More Real Estate Than You Can Afford: You shouldn’t spend the entire amount that a lender has approved of you. Many buyers end up “house poor,” which means they have a beautiful home but find it difficult to cover their daily costs.

Tip: You shouldn’t spend more than 30% of your gross income each month for housing. This creates room for savings, trips, and unplanned repairs.

5. Ignoring the House Inspection: It’s a risky move, but skipping inspections could strengthen your offer. Later on, hidden problems with the foundation, roofing, or plumbing could cost tens of thousands of dollars.

Recommendation: Always plan an inspection. It’s possible for even more recent homes to have issues that are invisible at a showing.

6. Taking the First Mortgage Offer: Loans are not all the same. If you accept the first offer you receive, you might miss out on a better one. Over the course of your mortgage, comparing lenders can help you save thousands of dollars.

Tip: Look into FHA, VA, USDA, or conventional loans. To see how minor rate changes impact your monthly payment:

7. Making the down payment with all savings: It may seem wise to put all of your money into a down payment, but doing so exposes you to risk. Even minor repairs can turn into major issues if there is no emergency fund.

Tip: Have at least three to six months’ worth of expenses set aside in addition to saving enough for your down payment. Some programs even assist with down payments for first-time buyers.

8. Purchasing Big Things Before Closing: It may be tempting to buy a new automobile or piece of furniture before you move in, but doing so could make your loan acceptance less certain. Lenders perform a second check on your finances prior to closing, and any new debt could disqualify you.

Tip: Wait until after closing day to make large purchases. Enjoy first, then shop.

9. Ignoring a Realtor: Some purchasers believe they can save money by not using an agent. In reality, the seller typically pays the commission. If you don’t have an agent, you miss out on professional negotiation and advice.

Tip: A competent agent can guide you through contracts, identify warning signs, and prevent you from overpaying.

10. Letting Feelings Take Over: If you fall in love with a house, it could influence your judgement. Some purchasers overspend or select a home that doesn’t meet their wants because they are so engrossed in the process.

Before you begin your search, jot down a list of the essential items you must have, and ensure you don’t compromise on price or quality.

Brief Summary: Avoid These First-Time Buyer Errors

Prior to shopping, get pre-approved.
Set aside money for both closing and continuing costs.
Prior to applying, raise your credit score.
Don’t go over your budget.
Obtain a home inspection at all times.
Research different mortgage options.
Have an emergency fund on hand.
Don’t make large purchases right before closing.
Assist a qualified agent.
Remain rational, not sentimental.

Frequently asked questions

First-time purchasers often make the mistake of forgoing pre-approval. Without it, you run the risk of missing out on better-prepared buyers or wasting time on houses you can’t afford.

Q: As a first-time buyer, is a 20% down payment necessary?

A: No. Even while some lenders only need a 3% down payment, don’t forget to factor in closing expenses and reserves.

Q: Should I wait until 2026 or buy now?

A: This will depend on how well-prepared you are financially. If you have money and a reliable source of income, now is always an excellent time to buy, even when rates fluctuate.

Conclusion:

Buying your first home doesn’t have to be a stressful event. By learning from common mistakes, you may enjoy the excitement of homeownership, protect your finances, and make informed decisions.

First-time buyer-specific information, tools, and calculators are available from The Mortgage Universe to help you at every stage. Budgeting, financing options, or simply beginning to dream are just a few of the things we can assist you with.

Category: Home buyers

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