Self-employed clients can be tough to qualify. They often think they make plenty of money because they’re looking at the top line on their tax returns or 1099’s.
The Story
My client was 1099’d, and his heavy tax write-offs resulted in loan denial by his bank.
Lenders (like you and me) look at the bottom line income on tax returns after deductions and add-backs, often coming up short on qualifying income.
My client made good money as a 1099 contract employee (aka self-employed) driving a truck and doing Lyft on the side. His 1099’s for the past couple years show about $75,000 per year in earned income, but his tax returns only show $11,000 qualifying income after deductions.
Deal Overview
Great credit with scores in the 770’s.
He has been saving for many years and has over $100,000 in the bank.
To qualify, we’re using 90% of the amount on his 1099’s, along with recent pay statements or bank statements to support the income and close the deal.
He’s making an offer right now on a home for $280,000 with $100,000 down. He’s ecstatic that we’re giving him a “yes” after my friend at the bank made the introduction.
Why This Might Matter
Most banks and credit unions require full tax returns in order to qualify. When you've got a client with good credit, money available for down payment, but the income is tough to document, there may still be options.
Work With Me
Do you have a deal that doesn’t fit your credit policy but the client seems solid?
Reply to this email or call me at 616.298.2743 for a same-day answer.
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