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Profile picture for Farleighjr

How to verify my self-employment income

I applied to refinance my mortgage. I have a regular job & I also own a part time business. My loan offficer is asking for 6 months of bank account statements to verify my business income.  Is that the norm?  I don't even need that income to qualify for the mortgage.  6 month of statements seems like so much.
  • December 06 2010 - US
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Answers (3)

Profile picture for XanderTeam
I'm not aware of many (any) lenders asking for 6 months bank statements for income purposes.

Your tax returns should be enough, and that should be to ensure that there's not a net loss from part-time work that would then need to be either subtracted from your regular base income or included as a debt along with any other monthly obligations.
  • December 07 2010
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Since your part time business income is not needed to qualify you for a loan, I would question why 6 months of business income would be necessary. What is necessary is that your business income not show as a loss on your last 2 yrs. of tax transcripts. If it does then that loss would need to be deducted from your regular income to calculate qualifying income.
  • December 07 2010
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Profile picture for Blue Nile
In addition to bank statements, they normally ask for two years of tax return forms and a form that authorizes them to get the records straight from the IRS.

The bank statements are to confirm the information on the IRS forms, to make sure your income is being reported accurately, and that your expenses are being reported accurately.  As business income often substantially fluctuates seasonally, it would have been more reasonable to ask for 12 months bank statements.
  • December 06 2010
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