Self Employed

[seneca]

How do you calculate income for the self-employed for the purpose of calculating the quantum of a housing loan?

[tiara]

One consideration is that borrowers must have been operating his business for at least 2 years to be considered as stable and continuing income. Average monthly income is determined by analysis of federal tax returns or sometimes a current P&L statement.

[liowkc]

For commission income, in order to consider as qualifying income, the borrower must have a 2 year history of earning commisions.

[JohnB]

Two years of tax returns are required and you just calculate the income after write offs. With the guideline changes most self employed borrower dont qualify for conventional home loans because they write off most of there income causing a Debt To Income Ratio problem. Fannie Mae has eliminated stated income and bank statement programs which is hurting us self employed individuals from buying a home or refinancing our homes. For most self employed borrower who dont qualify for a conventional loan the other option is a private money lender and borrower will be required to put 30 to 40% down and pay a higher interest rate.


John Broussard