STATE YOUR INCOME - The Self-Employed Advantage
Stated income programs are still alive and well. There have been some changes over the years with the changes in federal regulations, but stated income is still a valuable tool for the self-employed business owner to qualify for the mortgage you need.
Stated income programs allow you to literally state your income to use to qualify for your mortgage. This is only available to the self-employed.
There is some reasonability to what income you can state, it must be reasonable for your business and industry. You can't make up any number you want, it has to fit within reasonable guidelines. The story needs to make sense.
For example, if you are an IT professional running your own consulting business and you earn gross revenues of $100,000 a year, stating $80,000 as qualifying income could be reasonable. As an IT professional you probable do not have a lot of overhead or expenses as a consultant, so it makes sense to be stating a high net income relative to your gross revenue.
Comparatively, if you are a general contractor that earns gross revenue of $100,000 a year, you would expect a GC to have a lot of material and labour costs. So, stating an income of $50,000 or maybe $60,000 is more reasonable. The story has to make sense for the type of business and industry.
Remember stated income is not about your actual expenses and it is not about what you show on your tax returns. It is more of a reasoned approach to what your business could support for mortgage qualification. We do need some documentation that supports your current business activity.
This type of qualification is more subjective and you will need an experienced mortgage broker to help you put together the numbers and the right story.
For more information on stated income for the self-employed, contact your local Mortgage Broker, Sean Stewart at 905-427-9596 or firstname.lastname@example.org