How do you calculate your income if you're self-employed?

Asked by Lucy, Middletown, NY Mon Jan 5, 2009

My husband and I are both self-employed, and I'm trying to figure out our income from our last two years' tax returns. I realize this may sound like a stupid question, but do lenders look at your adjusted gross income? Your net profit from your Schedule C? Or something else? Also, will they average two years of tax returns? We're looking for a smallish mortgage @100K, have 20% to put down, and have good credit. Any info or suggestions for a good lender to look for would be appreciated. Thank you!

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