Self-Employed Getting Mortgage?

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My wife is self employed and we would like to get a home after we file our taxes for this year. Since self employed people have a harder time getting home loans someone suggested that we claim less deductions from the business to increase her net income. Has anyone else heard of doing this? Also, someone suggested that we might be able to claim less deductions and then file an amended tax return, after we get a mortgage, and claim the deductions. Has anyone heard of doing this? The first option seems legal to me since we would just be paying more in taxes but I don’t know if the second suggestion would be okay or not. If anyone could provide some guidance that would be great. We don’t want to do anything that is illegal or anything. Thanks.

3 Comments
  1. Reply
    Tsunami
    May 3, 2011 at 5:03 am

    it can be done.

  2. Reply
    Ken R
    May 3, 2011 at 5:09 am

    I would be careful, new laws make loan fraud a felony, if you plan on submitting one income knowing you are going to change it, its loan fraud and if you get busted for one reason or the other it may go bad for you.

    If you made an error on your tax return then fix it it’s not loan fraud. What your thinking of doing your walking a fine line… On the other side, as long as your making payments it I don’t think anyone will look into it, if you stop making payments and someone figures out the amount on your loan app is not your actual return… could get sticky

  3. Reply
    Janet P
    May 3, 2011 at 5:59 am

    Ken is correct, if teh banks find out you committed fraud you will not simply loose the house and serve time, but a felony will follow you for the rest of your life.

    Is it really worth it?

    The banks are going to be looking at your earnings for 2 years, not one.

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