Self-Employed Looking for Lending Information

[Nick Parenti]

Hello all,

My wife and I are looking to purchase a house-hack in the southern New Hampshire area. My question is in regard to getting funding for a loan due to my income. My wife has a W2 income. For myself, I own an e-commerce business so I am self-employed. I started the business in late 2022, so only have about 2 months from that year on my 2022 tax return, then have a tax return for all of 2023. I know lenders typically look for 2 years of tax returns for self-employed income. Would lenders approve us for a loan for a house-hack even though I don't have 2 full years of income on tax returns? The other note is that in 2024, my income from the business really sky-rocketed, 3-4x what it was in 2023. But, would my 2024 income even be considered towards pre-approval given it is not on a tax return yet? Any information/suggestions anyone can provide is greatly appreciated!

[Ziad Hamati]

Broker here. Sounds cliche but always best to reach out to a trustworthy loan officer and fill out an application because there are too many things to look at before determining how much you can qualify for. 

If you are going conventional, they will need 2 years of tax returns, no way around it.
We will use your "net income" after all deductions for 2022+2023 and divide over 24 months. We are able to add some of the expenses back to your income.

If that is not enough, we can do non conventional (Non QM), and once you establish 2 years anniversary as self employed, we can use 12 months of bank statements. Will average all deposits over last 12 months to calculate monthly income, and then depending on the type of business, apply an expense ratio. 

With non QM, lowest downpayment is 10% but you will be hit with a high rate. Best is 20% down.