How to Close on Time – Self-Employed


Mortgages have always been more challenging for self-employed purchasers.  As lenders, we have to analyze personal and business tax returns to determine what income is allowable for a mortgage.

  1. As lenders, we look at net-income for self-employed customers.  Most of us that are self-employed or on commission tend to think of our income as what we gross but that’s not how an underwriter will view income.
  2. Write-offs can be fantastic as a strategy to pay less in taxes but they can be a huge challenge if there isn’t much net income to base qualification upon.
  3. All pages of the tax returns are necessaryFinance
  4. If a business shows a significant decrease in revenue from the previous year, it can result in a declined loan.
  5. YTD Profit and Loss statement  should be consistent with previous years earnings.  If not, there should be a letter of explanation as to why not

We’re happy to answer any additional questions you may have about self-employed qualification.  We truly enjoy working with self-employed Borrowers.

 

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