Attention Self-Employed Buyers! Are you wondering how lenders calculate your income? Each self-employed purchaser is different, but it is likely that a lender will add back expenses such as ‘depreciation’, ‘depletion’, ‘business use of home’, ‘amortization’, & ‘casualty losses.’ Lenders consider these “paper write offs” vs. actual cash from the business. If you are self-employed, it is important to talk with your lender before you start looking for homes. Let’s connect & discuss your situation!
Related Article Title: Mileage Depreciation Add-Back for Self-Employed Borrowers Question: Can we add back mileage that was claimed on form 4562 (depreciation and Amortization) for a self-employed buyer? Answer: Fannie Mae says this about depreciation (see below). Form 4562 is what drives the information found on line 13 of schedule C, so it should already […]