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Profile picture for scubacuda

getting a loan with too many small biz deductions

For someone who is both employed full time and has excellent credit, what is the best way to get a loan if s/he has too many section C deductions on their IRS (i.e. side consulting business)?

(I'm guessing that it's either get a co-signer with enough declared income, file taxes with a higher declared net income and hope that they weigh that last year more heavily, or hope that good credit + paystubs outweigh everything else)
  • January 05 2011 - Staten Island
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Answers (1)

Profile picture for Erez Cohen
Since we are now in 2011, I would suggest you file your 2010 taxes and limit your Schedule C deductions.  We then would take an average of your last 2 years 1040 income and you may then possibly qualify.  You control your own deductions.  It may pay to bite the bullet and pay more in taxes this year to possibly allow yourself to qualify for home.  It is a small price to pay when you consider the benefits of owning a home in this depressed market.
Prior to filing, speak to a lender who understands how to analyze tax returns and they should be able to assist you in determing what income you need to qualify with.  I am not licensed in NY but I am sure you can find someone who is competent.  Search Zillow and ask the appropriate questions such as what can be added back in to your income, etc.
  • January 05 2011
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