As an independent contractor I can relate and understand some consumers who are self-employed experience swings in their incomes from year to year. This can cause underwriters to question the stability of their income, especially if there are large decreases in income for the consumer from year to year. This can lead to qualifying problems. There are several methods that can help these consumers. There are now conventional loan programs that only require one year tax returns instead of the normal two years. Using this method would eliminate any decreasing income questions from year to year since the underwriter is only looking at one year of income. A second method is to use an audited Profit and Loss statement for the consumer’s business to show that the income is again on the upswing. This can be effective if the consumer has not yet filed their tax return for the previous year.
For buyers considering buying a home, first step is to talk to a local lender to get pre-approved. Next? Start a relationship with a local Realtor :)
Spirit
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