Here’s What Small Business Owners Need To Know About Mortgages

Published:
June 3, 2014
Last updated:
November 12, 2021
Post cover image
In This Article

If you are an entrepreneur or a small business owner, you probably know that there are a lot of advantages to this lifestyle – the freedom, the exciting challenges, the opportunities and the ability to make a living doing what you love.

However, you also know that being a small business owner can make some things more challenging – such as applying for a mortgage for your home.

Many small business owners find it tough to get approved for a mortgage, because their income can be erratic and the banks want to see proof of consistent earnings over a significant period of time.

However, it is possible to qualify for a loan as a small business owner. Here are some important things that you need to know about the process:

Ask Your Mortgage Lender What They Look For

If you ask your mortgage lender, they will probably offer you a checklist for putting together all the information needed in your mortgage package. It should have instructions on what specific documents you need to include if you are self-employed.

Filling Out The Right Forms

When applying for the loan, you will need to fill out IRS Form 4506-T, which is a Request for Transcript of Tax Return. This is basically a form that will allow the lender to look at your tax returns from the IRS, which shows proof of your earnings.

You are not able to show lenders copies of your tax returns. They must get them directly from the IRS themselves.

Submitting A Profit And Loss Statement

It can also help to ask your accountant to prepare a Profit and Loss Statement, which highlights the amount of money that you have brought in compared to the expenses of setting up your business.

If you present several of these on a quarterly basis, it will prove to the bank that your business is growing and is profitable enough to cover your mortgage.

The important thing to remember is not to give up on the idea of owning a home just because you are a small business owner. Ask your accountant for help and take the time to submit the right proof of earnings, so that you get the mortgage for your dream home.

Get an Instant Mortgage Rate Quote Today

Have Questions About Home Loans?

Sammamish Mortgage is a local, family-owned company based in Bellevue, Washington that has been in business since 1992. We serve the entire state, as well as Idaho, Colorado, and Oregon. We offer a wide variety of mortgage programs and products with flexible qualification criteria. Please contact us if you have mortgage-related questions.

Other Blogs You May Like
View Current Seattle Jumbo Mortgage Rates, With or Without Points
November 27, 2024
4 min read
View Current Seattle Jumbo Mortgage Rates, With or Without Points
Find out the jumbo loan threshold in Seattle, along with current jumbo mortgage rates for Seattle,...
Seattle Jumbo Loan Rates Can Be Similar To Conforming
November 26, 2024
4 min read
Seattle Jumbo Loan Rates Can Be Similar To Conforming
The interest rate assigned to conforming loans versus jumbo loans can often differ. And many people...
Show 60 more posts
from this category

Connect with a Mortgage Advisor Today!

Whether you’re buying a home or ready to refinance, our professionals can help.

Compare Mortgage Rates in Your Area Instantly

No Obligation and transparency 24/7. Instantly compare live rates and costs from our network of lenders across the country. Real-time accurate rates and closing costs for a variety of loan programs custom to your specific situation.

Subscribe to our newsletter