A lot of self-employed people write off as much as they can on their taxes to show as little income as they can to avoid paying taxes. It’s actually written in the tax code. But what happens is it minimizes the self-employed person’s ability to buy a home.
So if you’re self-employed, and you call your bank and ask them to do your loan, they’re likely going to tell you, your declined. And here’s why: Big banks don’t like to work with self-employed borrowers that are writing off a lot on their taxes. But there are a lot of other lenders that have products that are specific for self-employed buyers like you.
These programs allow the lender to avoid scrutinizing tax returns but allow the lender to look at your bank account and look at your P&L balance sheet to understand your business and your cash flow, and lend you money based on that versus your tax return.
If you work with a lender that specializes in these programs, you will have the ability to own a home, which is why you got into business for yourself, to begin with: to realize that American Dream.
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