Case study 3 · Self-employed

Four self-employed buyers, the same income mistake

Four self-employed buyers with excellent credit and about 20% down could not qualify with their lenders. In each case, the income had not been calculated correctly from the tax returns.

Income correctedTold by Sarah Baraz · Mortgage Loan Officer · NMLS #1859224 · Team Baraz / CMG Home Loans

The situation

Four different buyers, at different times and in different cities, were purchasing new construction from different builders and working with four different lenders.

What went wrong

All four buyers were self-employed. Sarah described each as having excellent credit and approximately 20% down. Their lenders were unable to qualify them because they were not correctly calculating income from their tax returns.

What Sarah did

She reviewed the business and personal tax return information and performed the applicable qualifying income calculation. Sarah described the work as fundamental tax return income analysis, not an unusual workaround.

The result

Sarah helped the four buyers by identifying the calculation errors. Her original account does not document the closing date or final outcome for each of the four individually.

The lesson: An accurate income calculation is essential. Strong credit and a large down payment cannot make up for an incorrect qualifying income analysis.

Facing something similar?

A denial, a shaky preapproval or a tricky income question is a reason to get a second look, ideally before you sign a contract. Send Sarah your scenario.

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Examples are anonymized and provided for educational purposes. They follow Sarah's own accounts; no names, addresses or dollar amounts are included. Past results do not guarantee future outcomes. Loan approval depends on the individual borrower, property, documentation, program guidelines and underwriting review. This is not a commitment to lend. Sarah Baraz is based in San Antonio and licensed in Texas, Florida and California.