Getting A Mortgage When You’re Self Employed

Relocating to Duluth, MN

Getting a mortgage to buy a house presents certain challenges when you’re self employed. What you qualify for all depends on what the bank thinks you can afford. The bank determines this based on your savings, amount of debt you have (excluding your current mortgage if you plan to sell your house), and – here’s the kicker for us self employed’s – your income.

The benefit of being self employed, from a tax perspective, is the ability to take deductions. Mileage, home office, office supplies, meals and entertainment – well, nearly everything that helps you run your business is a write off. When you get your 1099 (the self employed person’s W2), you see your gross income for the year. When you go through your receipts, you’re calculating the deductions. Deduct those receipts from your gross income and, voila!, you have the income the government is going to tax you…

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