We often have self-employed borrowers come to us who are rolling in profits and cash, with perfect credit and everything else a good borrower needs. BUT, they do not qualify for financing.
The reason is that they often lack the necessary income history. No matter how good their current year may be, we cannot use the income to qualify them unless it is on their tax returns.
For example, we might have a borrower with year-to-date income of $400,000, but only $40,000 of income on his 2014 Schedule C, and a loss on his 2013 Schedule C. This borrower will likely not qualify for any competitive financing until he files his 2015 taxes.
Borrowers in this situation often get extremely frustrated, but our hands are tied by guidelines. Prior to 2009, we were often able to average in year-to-date income with the use of an audited or official P&L signed by a CPA. This is no longer the case.
Founder/Broker | JVM Lending
(855) 855-4491 | DRE# 01524255, NMLS# 335646