Self-employed and BuyingSelf-employed and thinking about buying a home in 2014? If so, now is the time to sit down and work on your mortgage pre-approval regardless of when this year you are thinking of purchasing. The income of a self-employed borrower is based on their net income, after all deductions have been taken, one of the great benefits of being self-employed but one of the biggest challenges when qualifying for a mortgage. To boot, we don’t just look at the most recent year’s earnings but rather a 2-year historical average. If, however, the most recent tax year’s earnings are less than the prior, the lower years earnings will be all that is used for qualifying.

With tax season upon us, now is the time to figure out where your income needs to be to qualify for a mortgage so that when you do meet with your tax preparer you can make the decision whether taking advantage of all the tax deductions available to you makes sense or whether you may wish to forego some of those deductions so that your net income is sufficient enough that you can still qualify for the mortgage you desire.

Let’s get together now to figure out what your options are in 2014! Give me a call for a complimentary pre-approval meeting.

2 thoughts on “SELF-EMPLOYED AND BUYING IN 2014

    • Thanks Terry! It’s always such a disappointment for a prospective Borrower who knows they can make the payment and has demonstrated they can with their perfect credit history and rental history but we can’t document that on paper so they don’t qualify to buy. the QM (Qualified Mortgage) will exacerbate this issue.

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