Self-employed mortgage borrower? Here are the rules
Mortgage lenders only count taxable income
If you hope to buy a house or refinance while self-employed, this point is key: lenders only count taxable income toward your mortgage.
Underwriters use a somewhat complicated formula to come up with “qualifying” income for self-employed borrowers. They start with your taxable income, and add back certain deductions like depreciation, since that is not an actual expense that comes out of your bank account.
Business owners and other self-employed workers often take as many deductions as they can. While this can save you a lot of money come tax time, it can also hurt you when it comes to your mortgage application.
For instance, say you earn $6,000 a month. But after deductions, your taxable income is only $4,000 per month. Here’s how your home buying budget changes:
Ralene Nelson, REALTOR®
JUST SOLD – 415 Drouin Dr, Rio Vista, CA 94571
This 3 bedroom 2 bath has 1, 426sqft of living space, central /ha, fireplace, dual pane windows, separate living room family room, indoor laundry room, and much more. Close shopping, restaurants, churches, and located across the street from the Drouin Park. This home needs a little TLC and it’s perfect for the first-time home buyer! READ MORE
JUST SOLD – 205 Shearwater Dr. Rio Vista
A luxuriously upgraded 2017 solar-powered Reflect in a great location just steps away from Trilogy’s picturesque Serenity Park with sleek modern interiors and a very private back patio. Features include beautiful plank tile flooring and lovely white cabinetry throughout, den with glass French doors, stylish lighted ceiling fans in every room, and a stunning kitchen with granite countertops, subway tile full backsplash, under cabinet lighting, the gourmet upgrade with soft close drawers, sleek stainless appliances, and a huge center island. Both baths boast attractive engineered marble counters and bath surrounds with under-mount sinks, and the master features separated vanities and a huge walk-in closet with laundry room access. Relax outdoors on the big open-air patio in a fully fenced and nicely landscaped backyard with no rear neighbors. Includes custom storage cabinetry and workbench in the garage and whole home water filter and fire protection systems. Trilogy is a 55+ community. READ MORE
REAL ESTATE NEWS & VIEWS
Mortgage interest rate predictions: Will rates go down in November 2021?
Mortgage rate forecast for next week (Nov. 8-12)
Some mortgage rate watchers got a big surprise last week.
As MBS Quoteline said on November 5, “It was a packed week for economic news, highlighted by key labor market data and a Fed meeting. When the dust settled, mortgage rates ended the week a little lower.”
But this should only be a brief reprieve.
Key reports released in the week showed strong economic improvements — including job gains and drops in unemployment.
Is it a good time or a bad time to buy a house?
Will the housing market improve in 2022?
The 2021 housing market was a double-edged sword for home shoppers.
Low rates and increased flexibility with working from home put many first-time buyers on the map. But limited inventory and skyrocketing prices made housing harder to come by.
But things could soon level out to a more ‘normalized’ market, according to the experts.
Although rates are rising and home supply remains low, competition might start to taper off and price gains could moderate.
In short, 2022 should be a better market for many buyers.
Things To Do This Week-End
Sacramento Arts Festival
Saturday 10AM-6PM, Sunday 10AM-5PM
SAFE Credit Union Convention Center (formerly Sacramento Convention Center)
Meet 225 of America’s Best Contemporary Craftspeople & Fine Artists Offering their Original Works in All Price Ranges. Shop for yourself, your home and one-of-a-kind holiday gifts. Plentiful Food & Drink! Wonderful Fun!
Our Box Office is at a New Location: 13th & K streetsFestival Entrance at 14th & J Streets
For Your Safety, the Festival is adhering to all State & Sacramento County Covid-19 requirements:You will need to show proof of vaccination or a negative coronavirus test to enter the festival. While attending the festival, you are required to wear a mask unless eating or drinking.
Sandhill Crane Festival
Due to COVID-19 uncertainties, plans for the festival have changed. These are the things we are doing to celebrate the return of the sandhill cranes:
- A limited number of tours are available on the website
- An online art display is being prepared
- Other virtual experiences are being planned
- The website will be updated regularly with information about the cranes and their activities
Thank you for your patience and understanding as we try to negotiate this fall’s ever-changing conditions. The Lodi Sandhill Crane Association is working hard to fulfill its mission to educate and raise awareness about the Sandhill Cranes
Tours have limited space and require registration. Fees vary and online registration is required. Online registration begins September 5, 2021. Keep following us as details develop.
Rib Cook-Off Festival at Weberstown Mall in Stockton
Saturday, November 6th, 2021 @ 10:00 am – 7:00 pm
SMA Entertainment presents the 1st Annual Weberstown Mall Rib Cook Off Festival and Car Show. This Festival will be the Rib Super Bowl competition. Ten of the best BBQ Rib cooks in the city fighting for branging rights and a cash prize. In addition to the best BBQ, there will be a large number of arts and crafts vendors, Beer Garden, Lots Of Food Vendors, and Kids Activities and more.
Tickets Online: $15.00, At Gate: $25.00, Box Office: 408-515-4420