Great Options for Self-Employed Home Buyers

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Filed under: Qualifying for a Mortgage Loan

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It is common for me to talk to clients who are self-employed and want to buy a home. As I dig into their tax returns, I see that they won’t meet the qualification requirements with the traditional full documentation for a mortgage. An effective tax plan can be great for managing tax burden, but make it hard to show the income for mortgage qualification.

Managing the tax liability is a balancing act, but on the other hand, it is important to claim enough on the taxes to qualify for loans and financing. It can be a challenge to qualify, even if you have the cash flow to pay the mortgage.

Options for Self-Employed Buyers

Luckily, there are great choices available to consider for self-employed home buyers. At Franklin Loan center, we have been looking into options that are available to ensure that products are available for all homeowners. We can use alternative documentation for the qualification.

These rates are a little higher, but it is a cheaper option when calculated over 10 years compared to paying all of the taxes needed to qualify for a loan. I’ve dug into the numbers and found that the difference in the payment (related to the interest rate) can be significantly lower than what you would have to pay for that tax liability for qualification.

To be clear: I’m not an accountant, and I’m not talking about tax evasion. Instead, I’m discussing ways that you can stick with an effective tax plan and still qualify for the mortgage that is needed to buy a home.

Personal Recommendations for Your Mortgage Approval

I would love to talk to anyone who is looking to purchase and wondering about the options that are available. Most of the time when I encounter a situation where people struggle with a full-doc loan, it is when the client is self-employed. Rest assured to know that I have solutions available and I am here to talk to you about the financing options that can be used.

If you know anyone in the situation, please send them to me. Also, like, share, and comment below so that this message can reach any business owners who need assistance with mortgage qualification.

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