When you are considering an application for a mortgage loan to purchase or refinance a home, calculating income is not as simple as asking for your salary. So make sure you have the following documents together at application to help us calculate your income accurately up-front.
5 Required Items To Provide When Self-Employed and Buying a Home
- Last 2 years of federal personal tax returns with ALL schedules
- Last 2 years of federal business tax returns for any businesses where you own 25% or more
- K-1’s for all ownership of businesses no matter the percentage owned
- 12 months cancelled checks for any debts reporting on credit that are paid by the business directly to the creditor (could allow us to exclude the debt from your debt ratio calculation)
- If you file corporate or LLC returns and there is an amount listed for “mortgages and notes due in less than 1 year”, provide either proof that the loan is not due in less than 1 year or sufficient funds in a business banking account to cover the amount listed.
Keep in mind that in order to use income reported on a tax return, we will need to be able to verify the accuracy of income through tax transcripts with the IRS. So if you are looking to use the most recent year tax returns, make sure that you have filed them with the IRS and that we have sufficient time to receive transcripts from the IRS which can take 2 – 8 weeks depending on the time of the year and the IRS turnaround time. We actually receive a lot of tax returns that have never been filed which cannot be used since they could be changed which is considered mortgage fraud. So make sure your returns turned in are the actual ones filed with the IRS.