self-employed can i buy a house?

[mystikal]

i run a assisted living group home out of my house and i want to buy a bigger house to run my business out of the problem is i make about 12,500 a month but i write off all of my housing expenses and everything else i can think of leaving me with little money  to show that i earned  so with that being said can i get approve for a mortgage showing that i only clear about 1000.00 a month currently i am renting out a house i will be a first time home buyer im scared i feel like on paper i am not making any money and there for i want get approve for any loan.

[ShanetheMortgageMan]

If you have a significant enough down payment (30%+) then there are loan programs out there that will qualify you based on your bank statements, interest rates aren't great but it's possible to get done.  If you don't have that much down (like most people) then you would have to qualify based on a 2-year average of your tax returns (your income after your expenses).  So if that is $1k/mo, then you can qualify, but it won't be for a ton ... the new housing payment + your other consumer debt payments (car, student loans, credit cards, etc.) can't exceed about 55% of your gross monthly income (i.e. if your gross income is $1k/mo, then you'd have $550 to spend on those other items).  Is there a family member with more income who'd be willing to co-sign?

Also, you can add back in "Depreciation", "Depletion", "Business Use of Home" and "Amortization/Casualty Loss" to qualifying income.  You may find this form helpful (or confusing as heck) when calculating your qualifying income from self-employment: https://www.fanniemae.com/content/guide_form/1084.pdf

[mystikal]

the fact that all my money is going to the houing expe nse will not help me?  let ask you another question if i write off less this year and show more of an income will tthat help?

[ShanetheMortgageMan]

Without reviewing your tax returns and where you are claiming the house expenses (and what exactly they are), I can't say for certain.

Yes if you show more taxable income then that will help you qualify in 2015, after you file your 2014 taxes.

[juleslanr]

I'm in the process now of trying to buy. I claimed EVERYTHING for years and had not much to show to get approved. Just this year I finally hit enough to qualify on my own, as I didn't go overboard on expenses. Downfall.. I owed alot of taxes   But the plus is, I now qualified for a 300K loan on my own. My only hitch is the credit. I need 40 points higher by Sept! Hence what brought me here

I will say, you need two solid years of income to prove it.