Schedule C or Adjusted Gross Income for Mortgage Qualification?

[David Martin]

For conventional mortgage financing for us that are self employed and also use a Schedule C, do lenders consider your AGI as well or are they more/only concerned with the numbers on your Schedule C?

Thanks!

[Judah Hoover]

They will look at BOTH. They will take the sch C and all other incomes that feed into your AGI... but then they will add back in any "depreciation" and "depletion", I forget the exact lines these are on, because they are what is called "paper losses". BUT BE WARNED!!! they will also disallow income if you haven't been getting it for 2 or 3 years, depending on the type of income and how stable the income is. Also any drop of 10% or more in any one category will have to be explained.

Calculating income has become very complex and you need to work with a good loan officer to be sure you are getting a fair accounting of all your income.

15 years as a loan officer speaking... thankfully a full time real estate investor now!