Another Option for Self-Employed Home Buyers

The way a self-employed person counts his (or her) income is not the same as the way a lender boss_largecalculates it. It’s not unusual for a self-employed individual to say he makes a six-figure income and then find out that only $60,000 will count. This is a blow that knocks him out of qualifying for the house he desires. But I have good news! There is now another option. I’ll explain.

Smart CPAs are hired to find all legal tax deductions. This is great when facing the IRS, but when all those deductions reduce the adjusted gross income severely, it can derail your goal to buy a home. Usually, the self-employed person finds this to be unfair and nonsensical. I can’t say I blame them, but the government sponsored agencies, Fannie Mae and Freddie Mac, have their regulations set in stone.

Another Source of Money Comes to the Rescue

Now there are lenders who will accept cash flow as an alternate way of looking at self-employed income. If the money comes into your bank account, then it counts. Expenditures are not subtracted.

Simply add up all deposits for 24 months, then take the average. That is your income on the “bank statement income program.”

Where to Get This Loan

The way to get this program for self-employed buyers is through a mortgage broker or full service mortgage lender. You will not find it at a bank or credit union. I work for a full service mortgage lender, Envoy Mortgage. I am licensed in California and Washington states. However, there are branches of Envoy in most other states, if you live elsewhere.

You want to ask the loan officer, “Do you have the bank statement program for self-employed people?”

business-card

If you have any questions, please let me know, and I’ll do my best to answer.

Leave a Reply

Fill in your details below or click an icon to log in:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out / Change )

Twitter picture

You are commenting using your Twitter account. Log Out / Change )

Facebook photo

You are commenting using your Facebook account. Log Out / Change )

Google+ photo

You are commenting using your Google+ account. Log Out / Change )

Connecting to %s

%d bloggers like this: