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One-Year Income Tax Returns Self-Employment Mortgage
I have been self-employed for 8+yrs, and my wife is W-2, My question is I want to qualify for a mortgage loan only using 1 year of tax returns, What would be the best solution for us, I have read that Freddie mac, if allowed, would accept 1 year of tax returns but is there any other options available for us, Thank you!
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1 Reply
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Getting a mortgage while only using a year’s worth of tax returns can be difficult, particularly for the self-employed. However, there are a few alternatives you can consider.
One-Year Tax Return Option from Freddie Mac
If a borrower meets certain conditions, they’re only required to submit one year of self-employed taxes, but only if they qualify with a specified score and a large down payment. However, speak to a lender who understands the Freddie Mac rules beforehand.
FHA Loans
The Federal Housing Administration (FHA) is more relaxed about self-employed borrowers. While FHA loans typically require two years’ worth of tax documentation, there can be exceptions, and a one-year tax return could do if you can showcase self-employment with a reliable income.
Portfolio Loans
Freddie Mac and Fannie Mae loans do not sell portfolio loans offered by certain lenders. These allow lenders to set their qualifying requirements, such as accepting one year of a tax return. It would help to speak with community banks or credit unions since they provide more such options.
- Alternative loans that require minimal documentation
Most lenders offer what are known as “stated income” loans, where a person applying for the loan submits documentation other than their tax returns. Such documentation may include bank statements or profit and loss statements. This is more common with non-QM lenders but will usually have a higher interest rate or fees.
Incomes for W-2 Apply
If your wife is a W-2 employee, her income may benefit your application. Lenders look at income for both of you, which is reassuring when offsetting any pressures stemming from your self-employed income.
Good Credit Plus High Capital Equity
In any case, if you have a good credit score and an adequate amount of capital equity, your chances of being eligible for a loan after just a year of filing your returns are greatly increased, regardless of the type of loan you apply for.
Best Option Is To Contact A Mortgage Broker
A competent and knowledgeable mortgage broker can give you the best possible scenario regarding all types of loans and their peculiarities. They will also help you find lenders who are relaxed about self-employed applicants.
Get Your Mortgage with One Year of Tax Returns!
Find Out About Options that Make This Possible! We explain what Freddie Mac, FHA loans, and portfolio loans are, the role of tax returns in applying for a mortgage, and what it takes to repay them! Solutions For Your Problem! Make sure you have the right lender.