what do lenders look at to pre approve you for a mortgage loan when you are self employed?

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I am self employed and own a LLC. Our gross income was 150,000 for 2008. We paid out 50,000 and wrote off 55,000 as business expenses. We wrote off the 60,000 as business expenses so we wouldn’t have to pay as much in taxes since our tax guy found ways to write off a lot of things. On my tax return it shows my income was only 45,000.

So I guess what I’m getting at is when the lender is looking at what you made do they take into account that I own a LLC? Or do they just see that my income was 45,000?

My fico score is 731 as of right now if that makes a difference.

  1. Reply
    April 29, 2011 at 11:30 pm

    They look at your tax returns for the last few years. And yes, they mainly look at your net income, and of course your FICO score.

  2. Reply
    April 30, 2011 at 12:26 am

    2 years of tax returns……

  3. Reply
    April 30, 2011 at 12:39 am

    Two years of your tax returns (the 1040s, not the returns from the business), so they will only see your income as being $ 45K.

    And your FICO score is also taken into account.

  4. Reply
    April 30, 2011 at 1:25 am

    Mortgage loan is a term used for the loans secured by a property. Mortgage loans refer to a loan secured by residential property, often for the purpose of securing real estate. Mortgage loans are priced lower than other loan structures because the value of the property risk for the lender.


    A fixed rate mortgage loan has its own benefit. If the borrower is budget conscious, he will remain at peace because the monthly mortgage amount will not change.Fixed rate mortgage loan is a loan where the interest rate remains the same through the term of the loan. Fixed rate mortgage loans are the most traditional form of loan.

  5. Reply
    April 30, 2011 at 1:44 am

    They will base the loan amount on that 45k. That’s the pickle the self employed are in: we want to take as many deductions as possible to avoid paying taxes, but it bites us in the butt when we try to get a loan! LOL They will also look at your FICO score, and will also want to see if your business income for the last 2 years of tax returns has increased or stayed the same.

  6. Reply
    Ed Atun
    April 30, 2011 at 2:24 am

    They mostly want the last 2 years tax returns. They are looking for your “net” income. It will be in your favor that you own a business. You will not be laid-off on your job. Your credit score is adequate to get a home loan.
    They will also be looking to see if you have a good track record of saving money..

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