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  • Tue, Jan 5th 2016, 19:43

    Buying a house requirement quiz

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  • Thu, Jan 21st 2016, 00:58

    How to calculate your income for qualifying purposes

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  • Thu, Jan 28th 2016, 17:33

    The Great Advantage of Home Loans (and why you shouldn't compare them to car loans

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  • Thu, Jan 28th 2016, 17:59

    The big error you are making if you are a 1099 employer!

    Most of us work hard... very hard. We run our own businesses or work as contractors, and we get paid in cash, thus getting a 1099. When we look at our annual income, we generate enough to meet our family and entertainment needs. Many of us also keep some money for savings or retirement. We are going really well. However, each year we try to pay as little tax as possible through deductions. The more we earn, the more we want to keep. That's why we don't blame you but understand you. If the law gives you that option, you can use it, can't you?

    But if you want to buy a home, there is a big problem when it comes to reporting too many deductions on your income. And which one is that? Reporting so many deductions when paying your taxes strongly reduces your personal income for that year. When buying a home, the lender pays more attention to your personal income rather than the business itself, and he will require your tax returns for the past two years. After examining them, he will realize that your income might not be high enough to pay off a mortgage. We've seen several examples in which our customers annually earn $100,000 or more, but after all the deductions reported (with the help of their accountants), they manage to prove an annual income of only $10,000 or even less. There is a big difference between what you actually earn and what you report.

    If we put ourselves in the lenders' shoes, we would better understand it. They want to help you to buy a home and know that you generate enough to pay, for example, $1,200 per month for rent. They are required to consider taxes reported; then they'll realize that you "generate" (according to certain taxes) only $833 per month ($10,000 per year divided by 12 months). With such a low income, no lender will lend you money because you will also have to consider other personal expenses like food, transportation, water, electricity, among others.

    If this is your case and you would like to buy a home, we want to give you some tips that will help you a lot. If you follow these simple steps, you will finally buy your house and give your family the home they deserve. Once you have the opportunity to pay taxes this year, let your accountant know yours plans for buying a home. They will understand that reporting too many deductions on your actual income is not convenient when qualifying for a loan. In this way, you will show a higher income, so the lender can determine your monthly installments to pay off the mortgage (home loan). You could ask your accountant to help you amend your last year's tax returns to show a higher income on the last taxes. If you decide to do this (amend last tax returns), you might have to pay taxes for the last year; the advantage is that this allows you to buy a home without waiting another year. Then, you can give your family what you've always longed for: a house that you'll finally get to call 'Your Home'.



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