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This guideline is about how to handle rental income when you’re applying for a home loan through Desktop Underwriter (DU), which is a tool used by lenders to assess loan applications. It covers various situations, including properties you already own and rent out, and properties you’re buying that will generate…
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When you apply for a home loan through Desktop Underwriter (DU), the system will tell you what documents you need to prove your income. However, the documents DU asks for might not always be enough to show how stable your income is. If a lender thinks more documents are needed…
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This section provides guidance on how to evaluate profit and loss statements for individuals who own their own businesses and are applying for a mortgage. When someone who owns their own business applies for a mortgage, the lender will look at the business’s profit and loss statement. This document shows…
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Let’s dive into how we look at the financials of a corporation when someone who owns their own business is trying to get a mortgage. Business owners who run a corporation report their taxes using IRS Form 1120. For more on what a corporation is, check another section called “Business…
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S corporations and some LLCs (Limited Liability Companies) have a special way of dealing with profits and losses. Instead of the company itself paying taxes on profits or deducting losses, these figures are passed on to the owners or shareholders. These shareholders then report this income or loss on their…
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When a person has an ownership stake in a partnership or a certain type of company called a Limited Liability Company (LLC), they must report their share of the business’s income or losses on their personal tax returns. This is done using specific tax forms provided by the IRS: Form…
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This section explains how income or loss from a business is reported for someone who owns a part of a partnership, S corporation, or LLC. When you own part of such a business, your share of the income or loss it makes is shown on a tax form called Schedule…
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This guideline focuses on how income or loss from farming activities, as reported on IRS Form 1040, Schedule F, is considered in the mortgage process for someone who is self-employed. When someone earns money from farming, they report this income on a specific tax form known as IRS Form 1040…
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Income can come from different sources, like renting out property, royalties from creative works, or profits from being part of a business partnership. The IRS Form 1040, Schedule E, is a document where you report this kind of income or loss when filing taxes. This form helps to move this…
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This section provides information about how income or loss from selling investments or property (reported on a tax form called IRS Form 1040, Schedule D) affects someone’s ability to qualify for a mortgage. The IRS Form 1040, Schedule D, is a tax form used to report profits or losses from…