Realizing that the tax deadline is approaching at breakneck speed, I started to think about the differences between receiving a W-2 and being self-employed. Employees have the luxury of showing their prospective lenders W-2s or pay stubs to secure a loan. Individuals who are self-employed have probably heard that it will be harder for them to get a loan versus an employee.
That isn’t always the case, however. Being self-employed is not a barrier to securing a loan with favorable terms. As long as a borrower can provide two years’ worth of tax returns that show increasing net income, it should not be a problem to get purchase money. The income does not even have to be all that substantial, if it has increased.
The key point is that lenders will look at the net income on the tax return, not the gross income. This is a particularly important fact to consider at this time of year. While it may often be in a self-employed person’s best interest to maximize deductions and show the least amount of net income possible, that strategy could definitely sabotage any effort to get a loan.
There are a number of additional methods for increasing your chances of securing a loan if you are self-employed:
Passenger Rail Study Offers New Details About Proposed Wilmington To Raleigh Route
Emma Dill
-
Apr 22, 2024
|
|
Severe Weather Postpones Trump Rally In Wilmington
Emma Dill
-
Apr 20, 2024
|
|
Will NC Be CNBC's Three-time Top State For Business?
Audrey Elsberry
-
Apr 22, 2024
|
“My mission and my goal is to take my love of marine science, marine ecosystem and coastal ecosystems and bring that to students and teacher...
Michelle Penczak, who lives in Pender County, built her own solution with Squared Away, her company that now employs over 400 virtual assist...
W.R. Rayson is a family-owned manufacturer and converter of disposable paper products used in the dental, medical laboratory and beauty indu...
The 2024 WilmingtonBiz: Book on Business is an annual publication showcasing the Wilmington region as a center of business.