Did you know that when you file a Schedule C tax form and claim a business loss that you are also potentially affecting how much of a home you can afford?
When a mortgage lender qualifies you for a loan amount they are analyzing all of your financial affairs. How much income did you make in the last two years? How much did you claim in write-offs? What’s your total debt to income ratio?
Let’s say your taxable income is $40K..before you claim $30K in business write-offs to increase your federal tax refund amount think about how that would look on paper to a lender that’s trying to qualify you for a $250,000 home with only $10K income after claiming that loss.
Are you an asset or liability?
Would you lend to you?