Facilities for independent borrowers: Use only 1 year of Tax Returns

For self-employed workers, obtaining financing for a home can be a challenge. The nature of your income and the way it is reported on tax returns often complicates the process. However, there is good news: It is now possible to qualify for a home loan using just one year of your most recent tax returns. This makes the process much easier for self-employed borrowers.

Here I explain how it works and how it can benefit you.

Challenges of Independent Workers

One of the biggest obstacles freelancers face is proving their income. Often, these borrowers' actual income is not fully reflected on their tax returns due to deductions and business expenses. This can make your net income appear lower than it really is, making it difficult to get approved for a mortgage loan.

Using Only 1 Year of Tax Returns

The good news is that we now accept files using only one year of your most recent tax returns as proof of income. This relaxation in documentation requirements has several important benefits for self-employed borrowers:

1. Simplified Process: By only needing one year of tax returns, the application process becomes simpler and faster. There is no longer a need to collect multiple years of financial documents.
2. More Realistic Reflection of Income: A single year's tax return can offer a more accurate view of a borrower's current income, especially if they have had a good recent financial year.
3. Increases Chances of Approval: This approach can increase the chances of loan approval by reducing the influence of previous years that may have been less financially favorable.

Conclusion

If you are self-employed and have found it difficult to qualify for a mortgage loan due to the way your income is reported, this new option may be the solution you need. Using just one year of your most recent tax returns can simplify the process and increase your chances of approval.

If you have questions or need help starting the application process, please do not hesitate to contact me. I am here to guide you and help you secure the financing you need for your home.