Mar
21
Mortgage Tip Monday

Do you LOVE working for yourself as an independent contractor, freelancer, or small business owner?

I certainly do!

But I have to be honest with you, my least favorite time of the year is tax season – especially as someone who is self-employed.

The “old” way of doing business as someone who is self-employed is to write off as many “business expenses” as humanly possible. This way you have to pay less taxes.

However, if you want to buy a house as someone who is self-employed, you’re going to need to do one of two things.

Option 1: Show your *real* income and pay your taxes.

Option 2: Save a ton of cash and pay for the house in mostly cash.

As a freelancer applying for a mortgage, you have to show regular, consistent income while writing off only your “logical” expenses. And yes, this means you’re going to pay more in taxes, because your loan officer is going to want to see tax returns that show your regular, consistent income.

My best recommendation? If you’re self-employed, start talking to a lender WAY in advance of you buying a house. I’m not talking about a month or two before you try to get pre-approved. I mean talk to a lender anywhere from a year to three years before you’re ready to buy. This way, you’re setting yourself up for homebuying success – even if you do need to pay more in taxes.

Need a lender? Send me a message and I’ll connect you to a great one!