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Home Buying in Hollis : Real Estate Advice

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Sun May 5, 2013
answered:
Hello Mr. Smith,

Your credit scores are fine but just remember, it's pretty cut and dry. If you own a Corp, you will need a two year filing history unless you hold 25% or less stock in the corp. If you own 25% or less we don't require your 1120s. But if you do own more than that 25%, we will be require your 1120s and your 1040s to income average you based on your past two Federal Income Tax Returns and Corporate Returns. Many people think because I am on salary, I should be able to use just that just income to qualify. Nope!

We Loan Officers today almost have to be forensic accountants in order to figure out some of these corporate returns. In addition, their are other areas of concern for borrowers based on the deductions they claimed. The Sch A summaries these deductions and specifically the amount brought forward from Form 2106. This form can be the kiss of the death for qualification. This number is deducted dollar for dollar from your Adjusted Gross Income.

In any event, please contact an experienced LO who specializes in self-employed borrowers. I can't tell how many times I get called in the 11th hour after borrowers have been in escrow for 45-60 days and their loan was turned down due to the way they filed their taxes AND it should have caught upfront.

Best of Luck!
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