There are so many different loan programs out there, but if you want to know “typical”…Typically you would need to be employed 1099 for 2 years (doesn’t have to be at the same company, but in the same line of work). They will take the $40,000 (not the $75,000) and will add back in any depreciation taken on your tax return (if depreciation exists). They will do this for the past 2 years and average your income. Some Lenders will also want to see 12 months of bank statements showing your deposits are appx. equal to what you say you make. If you don’t like to jump through those kinds of hoops you can look into a “Stated Income” loan.
Thanks,
Chireen
“My 2 cents worth…and priced just right!”
I’m a 1099 employee @ my current job for less than 2 years.
Let’s say I gross $75,000 but I have $35,000 in write-offs (Car/insurance/equipment, etc…) Will the mortgage company base my loan on $75,000 or $40,000 annual earnings?
Re: MORTGAGE BROKER QUESTION-SELF EMPLOYED INCOME- - Posted by James Strange
Posted by James Strange on August 23, 2003 at 02:27:17:
If you have real good credit you can state your income. If that is the case then you can use the one that you decide. If your credit is not that great then they will decide. Some lenders will understand about the write off issue and will use the higher number. But you will have show bank statements.
It sounds like you are self employed. Correct me if I am wrong.
If true, the mortgage company will generally want to only consider what you paid yourself as income from the business. They’ll be looking for copies of your tax returns to show all this.
