Posted on: 22nd Dec, 2007 06:48 am
Hi,
I am having trouble finding a mortgage company that will give me loan for the following reason.
In 2004, I had a negative income of about $100,000. This negative was carried over into 2005.
I earned about $60,000 in 2005, but the bottom line on my 1040 showed a negative income of $40,000. (100,000 - the 60,000 that I earned).
The remaining $40,000 was carried into 2006 in which I also made $60,000. So the 1040 showed an income of $20,000.
Isn't there any company that will open their eyes and realize that I was making money, but had a credit for tax purposes? This is absolutely rediculous. I have my company's tax return as well that shows that the company made money. Anybody that knows how to read a tax return can see that it was a carried over loss from prior years.
I am thinking about maybe waiting till 2008 which is only 10 days away, and filing my 2007 return on Jan 1, 2008. So at least then my prior 2 years will be 2007 and 2006. I am not sure if that will help though either.
To make matters worse, my wife has a job earning 48,000 yearly. However, she just started working there this month. Prior to that she was a college student.
Any help would greatly be appreciated.
George
I am having trouble finding a mortgage company that will give me loan for the following reason.
In 2004, I had a negative income of about $100,000. This negative was carried over into 2005.
I earned about $60,000 in 2005, but the bottom line on my 1040 showed a negative income of $40,000. (100,000 - the 60,000 that I earned).
The remaining $40,000 was carried into 2006 in which I also made $60,000. So the 1040 showed an income of $20,000.
Isn't there any company that will open their eyes and realize that I was making money, but had a credit for tax purposes? This is absolutely rediculous. I have my company's tax return as well that shows that the company made money. Anybody that knows how to read a tax return can see that it was a carried over loss from prior years.
I am thinking about maybe waiting till 2008 which is only 10 days away, and filing my 2007 return on Jan 1, 2008. So at least then my prior 2 years will be 2007 and 2006. I am not sure if that will help though either.
To make matters worse, my wife has a job earning 48,000 yearly. However, she just started working there this month. Prior to that she was a college student.
Any help would greatly be appreciated.
George
Well it might be possible for you to write a letter of explanation to the underwriter to consider your income however the underwriters typically lack imagination and are instructed to use adjusted gross income for all self employed borrowers. And technically you just made back your loses so they don't have to consider that as income.
You can also file the 2007 tax return early although most places will average out your 2 years income and there might be limitations on when you can use you 2007 returns to qualify for the loan. (they might have you wait till closer to April 15th)
Your wife's income is fine so long as she was studying for whatever she is doing right now.
So if trend continues you both will have 80-90k income you an show come 2008 (not sure if that is enough)
If you have a decent downpayment (at least 5%-10%) and a good credit (680+) you may want to take a look at stated loans as that will make it easier and you can state your full income of 60k + your wife's 48k
If the house is small enough you can maybee get a loan in your wife's name only.
Good luck
Happy Holidays
You can also file the 2007 tax return early although most places will average out your 2 years income and there might be limitations on when you can use you 2007 returns to qualify for the loan. (they might have you wait till closer to April 15th)
Your wife's income is fine so long as she was studying for whatever she is doing right now.
So if trend continues you both will have 80-90k income you an show come 2008 (not sure if that is enough)
If you have a decent downpayment (at least 5%-10%) and a good credit (680+) you may want to take a look at stated loans as that will make it easier and you can state your full income of 60k + your wife's 48k
If the house is small enough you can maybee get a loan in your wife's name only.
Good luck
Happy Holidays
Hi George,
Welcome to this forum.
As far as what I understand from your post is you had a negative income of about $100,000 in 2004. You have earned $60,000 consecutively both on 2005 and 2006. So the 1040 showed your income of $20,000. That is ok. But I can't understand what you are saying here- "Isn't there any company that will open their eyes and realize that I was making money, but had a credit for tax purposes?"
If you wish to get tax benefits, you can file your tax returns within 15th April 2008. So you have lots of time in hand. You can also consult with a tax adviser regarding this.
If you wish to get a mortgage, I agree with Eugene that you can go for stated loans as I think you are a self employed person.
Best of luck
Happy Holidays
Welcome to this forum.
As far as what I understand from your post is you had a negative income of about $100,000 in 2004. You have earned $60,000 consecutively both on 2005 and 2006. So the 1040 showed your income of $20,000. That is ok. But I can't understand what you are saying here- "Isn't there any company that will open their eyes and realize that I was making money, but had a credit for tax purposes?"
If you wish to get tax benefits, you can file your tax returns within 15th April 2008. So you have lots of time in hand. You can also consult with a tax adviser regarding this.
If you wish to get a mortgage, I agree with Eugene that you can go for stated loans as I think you are a self employed person.
Best of luck
Happy Holidays
Usually that is the way how the adjusted gross income is calculated. I think Eugene has offered sound advice.
You may go for a no-doc loan where you don't have to provide any documents and your income is not verified. But the interest rates for these loans are a little higher than the full-doc loans.
I heard that there are a few lenders who make full-doc loans based on the last 12 months' bank statement of your business checking account and the interest rate offered is also normal. But I am not much sure about this and you may have to search for lenders.
You may go for a no-doc loan where you don't have to provide any documents and your income is not verified. But the interest rates for these loans are a little higher than the full-doc loans.
I heard that there are a few lenders who make full-doc loans based on the last 12 months' bank statement of your business checking account and the interest rate offered is also normal. But I am not much sure about this and you may have to search for lenders.