Own our own Business, can we get a mortgage?????

[Anonymous]

Hi all, Long time lurker that has been learning a lot.  My DW and I own our company and in the past have been told that we would need 2 years of tax returns to be able to qualify for a mortgage.  We have only been in business for 8 months now.  However we have been in the same industry for the last 15 years.  Does it make a difference that we both receive a paycheck from our company as well as a W2?  Wouldn't it be just like working for any other company?  We pay ourselves decent salaries that are comparable with what we would make working for another company.  Of course at the end of this year we will also get dividends to add to our income.  Any insight is appreciated.

[ShanetheMortgageMan]

Self-employment needs longer to qualify since most businesses fail within the first 2 years.  When you do have the required self-employment history, both the corporation's returns and your personal returns will be examined to determine the overall income/loss (so if your corporation pays you $60/year but takes a $60k/year loss because of the salaries, and you and your wife are the only owners, that equals $0 in qualifying income).

[Anonymous]

Thanks for the information Shane.  I guess my real question is how does the lender determine that we are self employed if all we submit is our paystubs from this year and taxes from last year (last year taxes have nothing from the business on them)? 

[ShanetheMortgageMan]

You would indicate you are self-employed on the loan application, IRS verification, SOS, etc...