No as long as the business is actually closed it should not hurt your ability to qualify from an income standpoint. For example let’s say you opened up the side business a couple of years ago, claimed some monetary losses on http://bayarearealestatetrends.com/your tax return, but have subsequently closed the business. Lender will not need to take the losses as a liability against your income which should not have any effect on your borrowing power.
What you’ll need:
- documentation from the Secretary of State showing the business is in fact closed
- an explanation of why the businesses closed and why the business losses were taken
However, if you presently own a business that is still running and you’re taking losses or showing lower income to avoid paying higher taxes which is customary showing larger profits, you could very well run the risk of not having enough income to qualify for mortgage loan you may desire. This is the conundrum if you will self employed borrowers deal with.
On one hand of the spectrum if you show maximum profits you’re going to pay income taxes on those profits, but at the benefit of being able to qualify for a loan substantially more easily. The other option is showing lower profits, lower income which keeps the tax man at bay, but at the expense of risking the chances of qualifying for a home mortgage.
Are self employed or own your own business? Been told you can’t qualify for a mortgage? Get a second opinion by getting a complimentary mortgage rate quote for your purchase or refinance today!
RELATED MORTGAGE ADVICE FROM SCOTT SHELDON
For folks looking to purchase or refinance a home with the FHA Loan, the Federal…
Many mortgage companies along with the internet would have you believe getting a mortgage with…
View More from The Mortgage Files:
begin your mortgage journey with sonoma county mortgages
Let us make your mortgage experience easy. Trust our expertise to get you your best mortgage rate. Click below to start turning your home dreams into reality today!