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I have started the preapproval process to find a home in the $300k range. My income is at least $70k a year, and in route to $110k this year. Credit in the high 700s. I have all the necessary credit lines to qualify for a fha. But in my 09 and 10 returns, I am told that my 2106 business expences will drop my purchase price to $225k. I would like to know if there is anything I can do to get around this $1300 they say that I will spend a month. The down payment I can raise, but do I have to raise it to a conventional, and will that even help?
The general golden rule in mortgage lending is, how you file your 1040 is how your income is viewed. The theory is, if you are saying you make "$X minus $X" to the IRS, why should lenders ignore your 2106?
If you are looking for minimum down financing which would include VA, FHA or 5% down, no, I don't know how you will get around it. USDA would be the exception, but I'm willing to bet you make too much or there are few eligible properties in your area. If you are putting 10% down or more, yes, there are some lenders out there that do not require 1040s or transcripts on their portfolio money (I'm sure of this because that is a large part of my business in the mid-Atlantic area). Portfolio lenders march to the beat of a different drummer, but should not be confused with subprime money and typically offer ARMs (10/1, 7/1, and so on).
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