Talking to all my self-employed peeps out there
So check it out. A lot of self-employed people
Pay a lot of their debts through their business
Cars and credit cards, things like that
Here’s the reality of that, it has to be paid a certain way for me to exclude that debt
Look, again I say this a million times, I don’t want to get too deep in the weeds here
But, here is what you need to know,
If you are self employed and you have a debt
and that debt is paid by the business
I can exclude that debt from your debt ratio
Debt ratio is a proportion or relationship between your debt and your income
When people say “How much do I qualify for?”
Really, what they are asking me is a debt ratio question
So, to exclude that from your debt ratio is paid for the business
I need to prove that your business pays it
Here’s what I need, I need 12 months bank statement, business bank statements,
Showing that you pay the bill every single month
Add to that account full 12 month period of time
If you have just one payment, that is paid out from your personal account
I cannot exclude that debt.
Make sure that any debts that are being paid by the business,
are being paid through your business accounts with complete..100% consistency
And if that’s the case, I can exclude your debt
and maximize how much you qualify for
By the way, on the subject of maximizing how much you qualify for.
Let me just make a general tip to every American out there,
do not necessarily buy a home at the MAX you qualify for.
I think a lot of people realize that we need to dial it back
and be a little bit conservative these days.
One of the things I do on my strategy sessions, is I think through
over the next 3, 5, 10 years. What bills might you have,
Ailing parents you have to care for, college expenses, whatever it is.
So, make sure that we are not maxing ourselves out
We’re keeping ourselves comfortable
I talk a lot about the spreadsheet method and livability method
Obviously right now, livability is where I am focusing my energy
That’s what I got for you, I’m Scott DiGregorio,
Your Mortgage Guy, I’ll see you on the next video, take care.