Buying a home is daunting for anyone, but it’s notoriously hellish if you’re self-employed. People have a harder time getting a mortgage when they work for themselves, because it’s not as easy to prove you’ve got a steady income. It takes a lot of paperwork: tax forms, letters, licenses. The key to making it all easier is to plan ahead. Here’s what you should do. Make Sure You Can Verify Your Income Lenders want to know how much money you earn before they decide to give you money. It makes sense; they want to know you’ll actually be able to pay them back. When you have an employer, this is as easy as checking out your pay stub. When you’re self-employed, it’s more challenging. You’ll have to hand over your last two tax returns. To do this, you’ll fill out IRS 4506-T, giving the lender access to your tax records. From there, they calculate your average “monthly income” by adding your Adjusted Gross Income for both years, and then dividing it by 24. According to Quick Loans, they will look at any of the following forms that might apply: Schedule C: This is a common IRS form for freelancers and… Read full this story
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