Homeowner question about mortgage?

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Does anyone know if you have an FHA or another low cost mortgage plan, is it true that you cannot have a home based business because the loan is given for the home to be only used for living in?

4 Comments
  1. Reply
    tonalc1
    February 10, 2011 at 11:32 am

    No, it’s not true. However, if you sell the house within a certain period of time, and have been taking deductions for the part of your house that is your business, you’ll have to pay a fine/repay the taxes.

    I’m not sure of the time line. Contact a tax professional (I got this info from my accountant a few years ago).

  2. Reply
    patrickmcc55
    February 10, 2011 at 12:25 pm

    Most mortgages allow you to use your home as a business, if the only employees of the business are related to you and live in the home, and there are no customers at your home. Examples, such as a sales executive making outside calls, real estate agents, a plumbing business, etc are usually all allowable. A child care business would not.

  3. Reply
    bigrob
    February 10, 2011 at 1:23 pm

    You would have a problem if the ENTIRE home were used for a commercial purpose–not only with your lender but with your zoning commission and your neighbors, etc. But if you are just using a room as an office etc., there is no problem.

    If you deduct the part of the home used for business, you WILL trigger a TAX AUDIT. This is the number one red flag to the bad people (Infernal Revenue Scum). It is almost impossible to meet their standards for using part of the home as a deductible business location anyway. For example: If someone used their formal dining room as an office, but used it also as a dining room a couple of times a year, like for Thanksgiving and Christmas meals, then it would no longer qualify. It is not worth the grief it will bring into your life for what little you would be trying to gain.

  4. Reply
    dderat
    February 10, 2011 at 2:22 pm

    So long as you occupy the property as a residence, I don’t see any problem, so long as zoning permits the bisiness use.

    Check your town’ s zoning By-Laws, and read closely your mortgage deed. That’s where all the do’s and don’ts are spelled out.

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