Dear Tyler, I'm self-employed, and I have a lot of expenses and write-offs in my business. Does that affect my ability to get a loan?
If you own your own business, getting a loan CAN be tricky.
Let's say you make a million dollars a year, but you write off 950,000 in expenses. According to the IRS, You only pay taxes on $50,000 of profit. Good, right?
Well, that's the same number the Lenders use when trying to get you approved.
All those business expenses, mileage, home office deductions... they can come back to bite you. Now you have to wait until next year to file your taxes again so you can show enough income.
On the bright side...
There are different types of loans out there that are more lenient for self-employed people, but you usually need a bigger down payment.
Listen... The sooner you get your CPA and Lender involved, the more prepared you're gonna be for this situation. Because the sales prices aren't waiting around for you to get your taxes in order.
So if you're planning on buying in the next 12 months, you need to be thinking about this now.
Let me know how I can help.