Self-Employed and Looking to Purchase Real Estate?
Filed under: Mortgage News
There are many benefits of self-employment, but some entrepreneurs are worried about how their income will qualify for a real estate purchase. We work with all kinds of self-employed home buyers, and everyone has their own set of circumstances. In today’s mortgage market there are more options for self-employed clients than there have been in a while.
A Few Notes for Self-Employed Buyers
In most situations, you need to be self-employed for two years if you want to buy a home. Also, we need to have two years of tax returns, which we will use to average the net from those numbers. Sometimes, these requirements feel like a show-stopper for people who are self-employed.
But, right now is a great time of year to look at your tax returns if you are planning to buy a home. You can talk to your accountant about not going overboard on some of those expenses for the 2017 return. This discussion can happen before you file your taxes for last year.
In about 75% of the situations, we use this full-doc method to get financing for someone who is self-employed. There are also a few other options that should be considered if you want to buy a home.
Other Possibilities for Self-Employment
One of the new things that might be considered is bank statement qualification. If you are taking advantage of a lot of deductions, then you can show bank statements and create an income level based on the deposits that happen throughout the year. Asset depletion programs are other options that shouldn’t be overlooked.
One-year tax return programs might be possible for certain types of conventional loans. With this method, you don’t have to average the past two years, helping you qualify for a better loan if you had a strong income last year.
Self-employed homebuyers have a bunch of options that need to be compared. We are happy to offer personalized recommendations to help with your home purchase. Call Bill Provost at Franklin Loan Center for more information 760-282-4415 or visit www.homeloanpartner.com.
