need mortgage advice

[08rookie]

sorry its long...only read if you are bored...i value this board and the people that frequent the site... dont bash me please!

general outline...im self employed...cash business...my w2 are doesnt necessarily define my financial situation...my business pays for my car, cell phone, gas, tolls...the paycheck i write to myself is pry a lil more then what some people might spend a night out in nyc...im planning to purchase my first property in the next year and would like some advice to maximize my borrowing power...im looking small...maybe something under 200k...

i have some college loans in my name that i am paying, i have one credit card in my name that im paying and my car (even though it is getting paid through my business) is in my name only...

my debt to income ratio is 31%...my debt to credit ratio (the ration of actual credit given to the balance) is rather high...like 77%...my college loans were originally at 11,500 and now they are hovering around 8500...my bmw loan was original 25k and now its close to 17,900...my credit card limit is 2700 and my balance is like 1 grand...

of all the loans ive never missed a payment, never been late...my fico is decent like 680...not the best but not the worst...like is said bmw financial approved me for a 30k with my signature last year...

soooooo....should i continue to save money to throw down on the house? should i use the money that i have saved to pay down some debt and maybe decrease my debt to credit ratio to under 50%? the more money i use to pay off debt the less i will have to throw down. im worried that with my w2 will greatly effect the future loan amount more so then my ratios and credit score, even if my ratios and credit score were to improve greatly....so then am i to discuss with my CPA about giving myself a raise?! because thennnn if i give myself a raise i would declare more but only after 2 years because banks need at least 2 years of tax returns...

correct me if im wrong on this too...a friend who used to do mortgages said that if you are self employed and some of your expenses run through your business you can use a percentage of your expenses as income?!

lastly...do i need a mortgage broker? can i contact the lending institution directly and speak with the actual loan officer who will approve or deny the application?!

thanks to anybody who reads and responds!

[Stock]

They will not go by your w2 income, they will average your tax returns from the last two years. Pay down your debt and start paying taxes. Your debt to income ratio will be computed using your taxable income reflected on your ptr. Yes they won't count debt against you that is paid by the business.12 months of cancelled checks are usually requested to not count the debt. Let me know if you have any other questions.

[SHANE704]

im only a real estate appraiser so im not an expert on the details of financing but i deal with this on a daily basis...im in the same boat myself! Tell your loan officer EXACTLY what is goin on. If the business is in your name...take them some paper showing what your business is bringin in, and that you only pay urself a lil bit to minimize tax implications. definitely pay off some debt...ur credit score is border line. payin off that credit card should give it a bump up in the right direction. and be prepared to put some money down toward a house. In the good ole days people actually put 20% down on a house and financed the rest, now days people act like they DESERVE to have all of it financed...when you mention putting some money down they act like thats disrespectful.