My client has sole prop. trying to buy a house. what does the bank want?
This client shows no income, this year, started a business from thier own personal cash. The business is profitable.
What does the bank want before they grant this person a mortgage to buy thier house? What documentation, how do I structure things? There is still room to move around here.
I ve been trying to help this client get thier house closed before the year end, it doesn't look like it is gonna happen. Any thoughts.
PS I am a registered, NOT certified public accountant. Is there any assurance, I can give the bank on my clients behalf?
- TaxManLv 51 decade agoFavorite Answer
Basically, they want to know what the chances are that he will pay back the loan, or will the bank end up repossing the home. They want to know what assets he has, what income he brings in now and in the future, and what his family expenses are. They know he won't forgo feeding his family to pay his mortgage.
Many people (and I'm not saying your client falls into this category), hide sole-proprietorship income to avoid paying taxes. Then, when they go for a loan, they can't show that they have that income. They get denied. That's why you hear commercials saying, "No income verification required". These people are offering high risk loans for tax cheats.
- Anonymous1 decade ago
It sounds to me like your client should retain the services of a real estate agent or real estate broker. They would know what forms and paperwork the client needs.
- skipLv 61 decade ago
Have you tried offering interim financials? If the bank wants the "comfort" of a CPA do you know one who would review your work and sign off on it?