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Self-Employed (s-corp) 2+ years first time mortgage

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  • Self-Employed (s-corp) 2+ years first time mortgage

    Hello first time poster here as well as we will be applying for our first mortgage next month. I was wondering if anyone had any experience with mortgage approvals for the self employed? We are concerned having 2 years worth of tax returns to show usually not being enough? Our situation is that, the first year we barely had a profit, but with the second/last year making over $360k in profit. We are very excited but also very concerned and really have no idea what to expect. Thank you for any help.

  • #2
    I think you’re just going to have to jump in and find out what each lender’s requirements are. Shop around - terms and requirements will vary.

    Could you give us a little more info on your business (practice) situation? Just asking because, at face value, thinking an s-corp may not be the best choice in your situation.However, not enough info to comment further.
    Financial planning, investment management and CPA services for medical professionals | 270-247-6087


    • #3
      As jfoxcpacfp mentioned, you are just going to have to take the plunge and give it a shot. Two years of self employed income history is usually sufficient. There is a lot more that goes into self employed calculation than simply the bottom line net income. There are other deductions, such as depreciation, that can be added back into your income. Good luck!
      Eric Veronica - Physician Home Lending Specialist
      NMLS ID 83197


      • #4
        This is definitely an issue you want to discuss with your lender early. I suggest you DEMAND a full credit and income approval, which is where your full loan package is reviewed by an underwriter not just a loan officer.

        Due to the Ability to Pay rule in the Dodd Frank Act, lenders must PROVE your ability to repay the loan. Sounds like you will need to file your 2019 returns before you will qualify. Some lenders require two years of profits instead of one, however, so you will want your lender to have an underwriter review and approve.

        Let me know if you have any other questions [email protected]