If you are a Veteran looking to use your VA Home Loan benefits to become a Homeowner and are self-employed you may think that just because your business is growing & the monies are coming in that you will have no problem being approved for a VA Home Loan.
You may say to yourself – “Look at all this money my business is generating. I can afford a mortgage payment” well not so fast ……
See a VA Mortgage is what is called a Full Document Loan – meaning that you must show proof of income. And how do you do that? – Simple Paystubs and W2’s & in your case Tax returns
Let’s face it – a lot of you self-employed Veterans have never taken the time to incorporate your company & even if you did do that – How many of you “Pay yourself “a regular Paycheck on the books of your company payroll? Not a lot of you – That is my guess.
The thing is – without taking those actions – you may not be able to be approved for a VA Mortgage.
The reality is you write off as much income as you can as company expenses, so you reduce your tax liabilities – therefore leaving you with very little company profit – therefore leaving you very limited personal income to afford to pay a mortgage with.
So, you cannot have it both ways –
If you are self-employed – you need to incorporate your business – open a business checking account – then put yourself on the company payroll at an income range that will allow you to afford a mortgage. After that you need to file both a corporate & personal tax return & make sure everything you do is above board – on the books & done the right way.
After that, if you have 2 years of a track record with your business you will then be a prime candidate for a VA Home Loan.
The Veterans Homebuyers Network as always, is here to help you realize the American Dream of Home Ownership.
Make 2021 the year of home ownership – for more information – please call 917-960-4260.
We will leave NO soldier behind.