I am self-employed, and am looking for a mortgage loan next
year. I need to figure out how lenders will be underwriting my
qualifications/income.
From what I understand, self-employed borrowers will generally have to qualify
using schedule c's AND 1040's? So, how should I minimize taxes without it
degrading all my income for the underwriters' sake?
I have run into a few articles pertaining to what
types of schedule c expenses can be added back into my income for qualification
ability, and also personal return deductions impact on eligibility. I need help
figuring out what these are.
For Schedule C -
Can depreciable assets or assets that you've marked for depreciation
on your self-employed business income be added back into the income?
Can home
office expenses, such as rent I paid for my apartment and utilities, that I
used as a home office expense for my business be added back into my income when
qualifying for a mortgage loan?
I have a couple of one time
operating costs for my sole proprietorship such as a logo design for my
business, can this type of expense also be added back onto my net income?
For my 1040 -
If I take the
federal standardized deduction on my personal federal tax return, that
deduction reduces my taxable income? Will that deduction reduce my home buying
power since it lowers my personal taxable income? If this negatively impacts
it, do I have to take this deduction, or can I itemize as 0?
I am contemplating
on making a contribution to an IRA account, can that money be added back into
income and/or mortgage income qualification?
If I plan on being very aggressive with
personal tax deductions, will this also lower my mortgage qualification ability?
Thanks for your help!!
