11:00 · what I do
Self-employed, 1099 and seasonal income
If you run something, an underwriter is going to read your tax returns differently from the way your accountant wrote them. The gap between those two readings is the whole job, and it is worth understanding before you sign a purchase agreement.
Where this one goes wrong
Three things worth knowing before you are under contract, rather than after.
Write-offs cut both ways
The deductions that lower your tax bill also lower your qualifying income. Depreciation and a few other non-cash items get added back; most things do not. It is worth modelling a year ahead of buying.
Bank-statement programs exist and cost more
If the returns will not support the file, a lender that qualifies on deposits instead can. The rate is higher and the down payment is usually larger. That is a real trade, not a trick, and I will show you both columns.
Don’t restructure in the middle
Changing entity type, payroll structure or how you pay yourself during an application resets a lot of underwriting work. If a change is coming, we do it before or after, not during.
Illustrative throughout. Percentages and thresholds named on this page describe how these programs generally work, not a commitment about your file. Program rules change, lenders add their own overlays, and nothing here is an offer to lend or a rate quote.
Also
Other files I take
- 10
The three-decker, and everything like it
Buying a two-, three- or four-unit and living in one of them is the most Rhode Island way there is to own a house.
Read more - 13
Refinance, cash-out and the break-even
A refinance is only ever worth it against a specific date: the month the savings have paid back the costs.
Read more
Reach me directly
Talk about a self-employed file
Whatever stage you are at. If it is a house you have not seen yet, that is the useful time.
- Fastest(401) 555-0128Call or text. It rings on one phone.
- Writtennadia@botelho-mortgage.exampleReplies weekdays, usually within a couple of hours.
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