Being Self Employed and Qualifying For a Loan or Renting

[daycare]

I plan to print out my bank statements to show as proof of income.l How much of it will I be required to print out and show?

I plan to print out 1 years worth. Do I need to show deposit additions and subtractions, showing all the purchases I made? Or do I just need to print out the part that shows how many depositions and other additions I made to the account?

[SignMeUp]

Wouldn't your tax forms be better proof of income? That is what I had to show for a loan some years ago.

[daycare]

Wouldn't your tax forms be better proof of income? That is what I had to show for a loan some years ago.

I WRITE EVERYTHING OFF AND HAVE YET TO FILE FOR THIS YEAR. I had some water damage and lost all of my paper work.... I am about to file...

[sahm1225]

I used to work in the mortgage industry and we always used both.

2 years of taxes (to show you report your income, average of gross receipts, and average bottom line)
12 months of bank statements (we required all pages and would exclude any transfers as deposits).

For rental, I would have just the first page but be prepared to provide all pages. Most companies want to make sure it's actual deposits and not just transfers back & forth that are inflating the deposit totals.

Good luck!

[daycare]

I used to work in the mortgage industry and we always used both.

2 years of taxes (to show you report your income, average of gross receipts, and average bottom line)
12 months of bank statements (we required all pages and would exclude any transfers as deposits).

For rental, I would have just the first page but be prepared to provide all pages. Most companies want to make sure it's actual deposits and not just transfers back & forth that are inflating the deposit totals.

Good luck!

it does show deposit when it is a deposit and it shows when it is a transfer.
I don't have any transfers to my account at all, but my husband does.

[Lucy]

The bank will tell you exactly what they require to prove income. I'm pretty sure they'll ask for your tax return and bank statement. On the taxes, they'll look at the amounts before AND after deductions. They know that your "net" isn't really a true picture of your income. They've done loans for self-employed people, and most likely for childcare providers too.

You might be able to show them your prior year's tax return with an explanation that you're doing a late filing for this year.

I was thinking just your current month's bank statement would be required, but someone said 12 months worth, so I guess I'm not sure. If you have any investments (IRA's, etc.), you'll need statements on those too.

[mom2many]

We just refinanced our primary home last month and it is super difficult being self employed with legitimate right offs, that basically make it look like you don't make any money!

The process took almost 5 months.... It was completely insane! We had to give the bank the past 3 years of tax info and the last two recent monthly bank statements. They scrutinized it all and eventually gave us a new loan, so I'm sure they will pretty much want the same in most cases. Our bank wanted every single page from our bank statement... It seems like they are afraid of fraudulent info being submitted. I'm sure your bank will give you specifics though! Good luck to you!

[Chellieleanne]

When we were looking into buying a home, they wanted 2 years of tax returns(schedule c) from me. Being that I just started, they wouldn't include my income at all. They also wanted the past month of pay stubs from my husband and 6 months bank statements I think, something along those lines. So needless to say his income alone we were not approved for much of anything to buy a house. We decided to rent until he gets a better job and we pay off some of our vehicle loans(got those loans with no proof of income, just credit check).

As for renting, we got our place on my husband alone (and a good word from my uncle who worked at the company). When we renewed our lease we just had to go sign, they didn't want income or anything like that. Guess we are good tenants! In past apartments we have rented they wanted at least 3 months of bank statements and pay stubs. Plus tax returns.

[sahm1225]

it does show deposit when it is a deposit and it shows when it is a transfer.
I don't have any transfers to my account at all, but my husband does.

I used to do a lot of self employed mortgages. They were hard to do because of the amount of paperwork, but not impossible. We would look at the gross receipts on the taxes & the net (we were able to add back in the line on the taxes that says 'business use of home' and a few other deductions). Then we would use either the total deposits (on personal bank statements) or ending balances (business bank statements). We would try and match the total
Average deposits to what was on the gross receipts on the taxes (so for example your gross receipts are $50,000 but your deposits show $100,000, then we would have problems. Mostly because the IRS would get paid first if the client was found to be defrauding them.)

If you are serious about buying, go to a bank and see what they say. Or you could always call a realtor and see what mortgage company they recommend. Brokers got a bad rep after the real estate bubble burst, but a lot of times they know which lenders are more likely to lend to self employed.

Good luck!

[Sugar Magnolia]

I also recently refinanced. 2 years of tax returns is standard. "most recent" meaning you could be under an extension for last year (I was :

BUT I refinanced with the bank that holds my business checking account. Easy pie. And they were small business friendly, which is great because my husband works the daycare center too. Fifth Third Bank.

[Childminder]

We recently refinanced our home with the HARP program and my husband which lost his job in 2008 and now works 15 hours a week at minimum wage was the one that got it. They looked at his W-2 and our tax return and even though I'm the breadwinner and he doesn't make enough in 1 year to pay 6 months payments, they wanted nothing from me. I didn't even sign it.

Just apply and wait for them to tell you what they want to see.

[EntropyControlSpecialist]

Doing this now...

I will let you know when it makes it to underwriting. I am going through Guild Mortgage and they are based in cali (while I am certainly not). My current home's loan is through them.