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Self Employed

Friday, January 25, 2013 - Article by: MICHELLE DEMA - Embassy Funding LLC NMLS FL 1449883 & NY 854225 - Message

Self Employed

A few tips to help the self employed borrower.

Unfortunately because of abuse and miss use of loan programs true self employed borrowers have felt the crunch more than most. Stated income loans have virtually gone away, there may be a couple lending institutions in the country that will entertain them, and if they do the guidelines are so strict most can't qualify.

Some tips to help you if you are self employed

Put everything you possibly can in your business name and pay for those bills out of your business checking or savings account every month. Don't put your mortgage in the business name or corp unless you know you won't be refinancing in the near future as it has become tougher to get loans for properties held in an LLC or Corp, you can find them but extremely high interest rates compared to conventional.

Speak with a mortgage professional as soon as possible if you are thinking of refinancing or buying a home. Explain to them that you are self employed and let them know you are looking to refinance or purchase. A mortgage pro will need to look at your last two years tax returns, because that's what lenders will typically require. Remember it will be the net that is looked at typically unless you had a one time major deduction, for the last two years and then that will be averaged to come up with the income used. There are some other ad ins to your net like depreciation that can bring up your bottom line, but for a quick look take the last two years and average them and that's the income number that will be used to figure your Debt to Income.

These are just two tips, the first will help you lower your debt to income, by paying debt through the business, and as long as you can prove it typically for 12 months, you can remove those items from your debt to income thus lowering it significantly. Second by going over your income with a mortgage pro, they will be able to tell you where your income would need to be for you to qualify. So when tax time arrives like it is you can sharpen the pencil as to what deductions you will be taking.

If you or anyone you know is self employed and would like us to give them a free consultation please have them reach out to us at 201-962-3555 or and ask for Michelle or Benny

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