How to State Income When Self Employed
Part of the Video Series How to Organize Income & Assets
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Video Transcript
How to State Income When Self Employed
Hello, my name is Brett Staggs and on behalf of Expert Village, I am here to show you how to organize your income and assets for a first time home buyer. When applying for your first home loan, if you are a self employed person, you are going to have to state your income. In many cases, not all the time but in many cases self employed person will, what we call 'state your income' which basically means you say this is how much I make and they are not going to document it because most times if you are self employed you don't get a pay stub. So you have to state what income you make. A very important part of stating your income, is making sure it is believable. You can get in a a lot of trouble if you state your income much higher than it is and a year later they go a pull your forty five-o-three which is a tax form that allows them to pull your tax returns and they look and see that you only make half than what you said. So it can potentially cause a lot of legal trouble. So you have to make sure you are very honest and it is very believable what you make as a self employed person. For instance if you are a plumber and you say I make ten thousand dollars a month and even if you are being totally honest cause some plumbers do, you have to provide more documentation. Like in a bank statement, it will show your deposits from work. So just be prepared for stating your income to have to prove in other ways than your pay stub.
Hello, my name is Brett Staggs and on behalf of Expert Village, I am here to show you how to organize your income and assets for a first time home buyer. When applying for your first home loan, if you are a self employed person, you are going to have to state your income. In many cases, not all the time but in many cases self employed person will, what we call 'state your income' which basically means you say this is how much I make and they are not going to document it because most times if you are self employed you don't get a pay stub. So you have to state what income you make. A very important part of stating your income, is making sure it is believable. You can get in a a lot of trouble if you state your income much higher than it is and a year later they go a pull your forty five-o-three which is a tax form that allows them to pull your tax returns and they look and see that you only make half than what you said. So it can potentially cause a lot of legal trouble. So you have to make sure you are very honest and it is very believable what you make as a self employed person. For instance if you are a plumber and you say I make ten thousand dollars a month and even if you are being totally honest cause some plumbers do, you have to provide more documentation. Like in a bank statement, it will show your deposits from work. So just be prepared for stating your income to have to prove in other ways than your pay stub.
About the Expert
Expert: Brett Staggs has been working in the mortgage industry for the past 6 years. He has worked for a title company, a credit reporting company, and two major banks. Read More
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