Self-Employed May Have Harder Time Getting Mortgages

Home loan modification for the self-employed is becoming increasingly difficult. Before and during the recession, stated-income loans were easy to obtain, and the percentage of people liberally declaring their income, especially in light of tax returns, was high. Today, for the self-employed, interest rates are about a quarter percent higher than for the non self-employed.

The way for most self-employed folks to get home loan modification is to provide two years of tax returns. For many, the deductions they submitted on their tax returns lower their official income levels, and make qualifying for a loan trickier.

The best way to get loan modification help is to have a credit score over 700, and have two or more years of reliable income. Easier said than done, especially in the tail end of a recession. Small business owners should do the math before determining what is tax deductible and whether it will benefit them to declare it if they want loan modification help.

Getting home loan modification comes down to work. Providing paperwork and determining whether a few thousand dollar deduction one year will save you more cash than on your loan in the long run, can wind up saving you a lot of money over the course of a few years.