Wednesday, February 21, 2018

Tips for Qualifying for a Home While Self-Employed

Being a self-employed homebuyer can be tricky. It doesn’t have to be, though.

Click here to see if you qualify for a loan

Self-employed borrowers have to go through more hurdles than most when it comes to qualifying for a mortgage. When you are your own boss, you don’t have anyone to report to. If you’re a solo agent, you definitely don’t have somebody keeping track of all your finances and money for you.

Self-employed borrowers don’t have W-2s like most people. A lot of them have 1099s instead, and there can be quite a few complications that come up with these when it comes to qualifying for a loan. If you’re self-employed, here are three easy tips that will greatly increase your chances of qualifying:

1. Find a good accountant or CPA. Not all of them are the same and not all of them will be able to give you the best advice when filing your return. Even though you might make a lot of money, your qualification is really based on what you report and how you report it. There’s that fine line to toe between claiming enough to buy a house and taking all the deductions you can as a business owner. However, a good accountant or CPA will be able to help you minimize your tax risk without having to get rid of all your write-offs.

2. Find a mortgage company with savvy underwriters and loan officers. Experience is very important here. Business tax returns come in all shapes and sizes, so it’s important that you hire someone who has seen it all and understands the self-employed borrower and how to maximize their buying power.

Going to a big bank might not be your best option.

3. Find a mortgage banker. A lot of times, people want to go to the big banks to get a loan. However, the big banks typically don’t have people who are self-employed (like myself) reviewing your documents for you. It’s a one-size-fits-all approach, but what you really need is a custom plan. That’s definitely something our team can assist you with.

If you have any questions for me about this topic or anything else relating to mortgages, taxes, or loan programs, don’t hesitate to give me a call or send me an email. I look forward to hearing from you soon.