Business Owners and Home Buyers
Business owners wanting to buy a home have a slightly different process to go through than home buyers who are employees. Why? Many reasons! I’ve included a few of them and some practical steps you can take to make the process easier:
History of owning a business
The amount of time you’ve owned your business plays a major role in the approval process. Mortgage underwriters want to see a long standing track record of income and the likelihood it will continue well into the future. If you’re in the first few years of owning a business, your track record is relatively light and could impact your approval decision. If this is you, I still want to talk with you! Give me a call or shoot me a text so I can go over all the specifics!
Text Me: Don McCartney – (847) 727-9312
Business write offs
The tax rules around small business accounting allow small business owners to take advantage of a wide array of write offs. There may be nothing wrong with your write offs. Perhaps, your CPA encouraged you or advised you to take them all. Great. (PS. We’re not CPAs or Tax Advisors, please consult with your local tax professional regarding business write offs.) What he or she did by including those write offs on your taxes was reduce your taxable income in order for you to pay less taxes. Great. Right? Well, that helps for tax time. However, it may reduce the amount of income that your GREAT MORTGAGE broker uses to determine your maximum loan amount.
Not all write offs impact your taxable income. Did you know that? I have many examples of happy business owners who I helped get a loan because I know a lot about underwriting guidelines, have access to a number of different lenders, and can help guide them through the process.
Inconsistent income
Business owners know this: The cashflow and income aren’t always consistent. Our underwriters understand that, too. When they review a file for a business owner, they look to see how consistent the income is and if it’s increasing or decreasing over time. Very Important: Just because you have declining personal income from your business does not mean you are unable to get a mortgage. Let’s talk about your specific situation!
Call Me: Don McCartney – (847) 727-9312
Planning ahead
The best thing business owners can do is plan ahead. This starts with reaching out to me very early in your process so we can discuss your timeline, situation, and needs. I love working with business owners of all types. The earlier in the process the better! Even if you have no idea where you want to buy, we should talk. There are many options and ways of helping if we have time to do them.
Related: Am I Ready to Buy?
Show taxable income
Underwriters want to see taxable income. So, especially around tax time, consider what your personal financial goals are. I’ve also working with a number of my clients and their CPA to guide them through this process. Not sure what questions to ask your CPA? Give me a call and we can talk about it! Or, we can do a conference call!
Trust your broker
I’ve been originating mortgages for quite a while. What’s better than that is the wide variety of lenders I’ve secured to help all our clients get the best rates, best terms, and most flexible options for the home financing. I would be honored to talk with you about all the options that are available. Please give me a call!
Don McCartney – (847) 727-9312