Self-employed borrowers often face hurdles that make it difficult for them to get approved for a mortgage to purchase their new home. The reason is that when you are self-employed you can "write off" many expenses that W2 employees cannot, and while this is a good thing when it comes to calculating how much is owed for taxes, it also reduces the income the mortgage lender will use when underwriting your loan application.
This issue can be even more of a problem in the first couple of years of self-employment due to all of the start up expenses being written off. Often, those new to self-employment will actually show a loss in the first couple of years in business. Not only will this prevent them from being able to get approved for a mortgage in those years, it actually hurts them in following years as well as lenders will average the income earned over the previous two years and use that amount as the borrowers effective income when underwriting the loan.
However, I have good news. VanDyk mortgage has a program that will allow those that are self-employed provide only one years tax return. This means that you only need to have 1 year of good income to qualify for a home loan instead of two since we do not have to average the previous years income with the most recent year.
Call me today and see if our program for Self Employed borrowers can help you with your new home purchase.