Profile picture for ramcorp

I gross over $150K from self employment and salaries but cannot qualify for a mortgage. Why not?

I minimize my tax liabilities by incorporating most expenses into business operations and so show a minimal net. My salary of about $45K is from a 30+ year part-time college teaching job.
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May 20 2010 - View Park-Windsor Hills
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Profile picture for wetdawgs
If all your income is going to business expenses, your income is not available to pay a mortgage.    If the income is being deducted to minimize taxes and really is there because you are stretching your deductions, go back and redo your tax returns for the last couple of years and you'll have a higher limit for your qualifications.

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May 21 2010
Unfotunately most lenders will disqualify a large portion of self employment earnings.  Being a real estate broker, I've run into the same problem trying to secure financing.  If all your money isn't coming in from from a source that you don't have direct control over, and isn't coming in on an exact schedule, it gets deemed as 'risky'.  I guess they'd prefer we all work as mindless drones to keep everything nice and consistent for them. lol
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May 21 2010
Profile picture for workabee
Hotlink plugs are for lames. Rapid needs to read the spam policy or Rapid will get booted out of the third world and into the fourth link
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May 21 2010
You may need to lower your loan amount or pull your Credit report. Do you have 2 mortgage payments in the bank too buy new home. If you need more information : refiwithwayne.com. They have helped many of my clients.
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May 21 2010
Profile picture for Pasadenan
You answered your own question... you spend all the money, thus you don't have any money to make mortgage payments....  If you paid taxes on your income instead of spending it all, you would only need to provide 2 years of tax returns to get the loan you desire.

Why even have a business if you aren't going to net any income from it?  And if you are spending the money on things that have nothing to do with the business, then would you like to be audited by the IRS so that others don't have to pay your share of the tax burden?

Besides, $45k income is plenty to get a loan of $280k, assuming no other debt.
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May 21 2010
 
Related Questions
I gross over $150K from self employment and salaries but cannot qualify for a mortgage. Why not?
Profile picture for wetdawgs
Latest answer by wetdawgs
May 21 2010 | 5 answers
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