Self Employed Mortgages | Are your tax returns a problem?

Are you a self-employed person and when tax time comes around you either get very creative or ask your CPA to get very creative or ask your CPA to get very creative so that you can all as very little to the IRS as possible? Well congratulations on reducing your taxable income! I am Laura Borja and I welcome you to this week's The Mortgage Minute where I'm going to tell you why that's not such a great idea if you're trying to qualify for a home loan You may have saved yourself some cash in reducing your taxable income so you don't have to pay Uncle Sam but you might be shorting yourself in your ability to qualify for that home that you want for you and your family

As a self-employed person you need to understand that lenders do not use the gross profit or gross receipts of your business We start off with looking at your net profit, the very bottom line then we take a look at all of your tax forms which is why we asked you for complete copies and there's some items that we add back in some items that we deduct from your taxes to calculate what we consider to be your qualifying income for self-employment That amount might be a small percentage of what your business is actually taking in So that's something that you need to keep in mind as you're filing your tax returns and also remember we require two years of tax returns so making the change is not something that can happen instantaneously because even if you were more conservative with your write-offs let's say in 2016 if 2015 you wrote off the majority of your income, the two year average might still keep you from being able to qualify for that home loan that you want so there you have it a quick overview of self-employment income for the purpose of qualifying for a loan Have any questions or maybe want to know how much qualifying income your tax returns actually show us? By all means reach out to me you can send me an email give me a call shoot me a text Find me on social media Don't forget to share the video with your friends hit the like button and if you haven't already done so subscribe so that you can get notified of all of the videos as they are posted Thanks for watching this week's episode of the mortgage minute I'll see you next time

Source: Youtube

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