Three tips for self-employed people looking to purchase a home.
Tip number one: Talk to your loan officer before you file your taxes. Now, we can’t advise you on how to file your taxes or what to put in there, but what we can do for you is a full pre-approval. We can take a look at your previous year’s tax returns and tell you what you would qualify for based on how you’re currently filing.
Tip number two: Understand whether you need one year or two years of tax returns because this can differ greatly in the income that’s being used. Most loan programs require two years of tax returns, but we actually do have some options where we can use as little as one year of tax returns in order to qualify you.
Tip number three: If normal conventional financing doesn’t work for you, then we have outside-of-the-box programs, such as our bank statement program. Now, the way this works is it collects 12 months’ worth of bank statements and takes the deposits from those bank statements and uses that as income. The lender will have some sort of expense factor they use to offset expenses, but typically this gives you a much larger income amount if you wrote too much off on your tax returns.
So before you move forward with anything, talk to a loan officer, go over all your options, see which one is best for you, and make sure you’re in the best position possible to move forward when you’re ready to purchase.
