As a self employed individual you may run into problems when it comes to mortgages and mortgage lenders. Mortgage lenders like to verify income before approving loans. For the self employed, many mortgage lenders want to document two years of self employment income. The documentation requested is usually your self employment tax returns. Some lenders count the profit you claimed on your taxes as your average income. Some may use a portion of your deductions and write offs; other mortgage lenders may not count this as income. If you dont have two years of tax returns to document your income with you can find lenders who are willing to accept two years of bank statements to verify your income. The advantage of using bank statements is you can document a higher amount of cash flow than is evident on your tax returns. If this is not an option for you there are lenders that will allow you to state your income on a low doc or no doc mortgage loan. This can be helpful for people who are paid on a commission basis or are recently self employed. This type of loan will put a heavy emphasis on your credit score and you may be charged a premium interest rate. Interest rates are still at historic lows and the market is extremely competitive; these factors can work in your favor if you take the time to research lenders and shop around for the best deal on your mortgage. |
