High Tax Subs

What Debts Should be Paid by Your Business Before You Get a Mortgage

By June 21, 2019September 2nd, 2021No Comments
someone calculating and writing down notes

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.


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