FHA Mortgage Loan Approval Question...?
I would like to get an FHA loan to purchase a new home. I work full time in a salaried position and I also am self employed part time for extra money and to build my savings (These earnings are about $5,000 a year and I only have tax returns and a journal to show proof of this income) . I pay taxes on my self employment earnings but do not want this money figured into how much I can be approved for. Is this possible and will my records be a problem for loan approval?
- 1 decade agoFavorite Answer
If you don't want to use that income, just don't include it on the mortgage application. As long as you don't need the income to qualify for the loan amount you want, it won't be a problem.
As for your records...the only thing that quickly comes to mind as a possible issue, would be your savings account. You will have to show the last 2 months of your bank account statements to show assets. All large deposits have to be explained. (Anything 110% of your paycheck) Therefore, if your self employment income has caused deposits higher than that, you will need to prove the source of the money.Source(s): Mortgage processor.
- golferwhoworksLv 71 decade ago
no just do not place it in as income but know this that you will need to write a letter of explanation as to why your taxes differ from what you say you are making if self employed part time for over 2 years. Or claim the income but make sure the loan officer only figures the home based on salary and not total income
I am a mortgage banker in TN & KY
- starrfyrreLv 71 decade ago
You should include the income, because at closing, the bank will require you to sign a form so they can pull your tax returns for the past two years. I know this because my husband and I are closing in three weeks with an FHA loan.
- RosemarieLv 44 years ago
Beverly is right. You were originally approved at a lower rate. Now they have to run the scenario at the new (higher) rate to see if you still qualify. A higher rate = higher payment.
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- Anonymous1 decade ago
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