How can I get pre approved for home loan as small business owner? If paying myself little but business is good? Are there any lenders or lending programs you can get per-approved using business incomes instead of personal income or both??

Originally posted by @Junji Yokota :

How can I get pre approved for home loan as small business owner? If paying myself little but business is good? Are there any lenders or lending programs you can get per-approved using business incomes instead of personal income or both??

 Lenders will generally look at two years worth of taxes if you are self employed. The issue can be if you are new to business (less than two years) or if your business is showing low income or loss for one or both of those years. Have you met with a lender to discuss and if so, what did they say?

@Joe Splitroc

I have been in the business for about 4 years and business is not showing loss, about $300k-$350k annually, but I pay myself low. And I did talk to one guy mentioned about there’s lending programs uses business revenue instead but I can’t getting in touch with him. Do I just need to save up and buy it cash??

There are several ways for self employed borrowers to qualify for a loan:

1. IRS taxes net income plus depreciation two years

2. Bank statement deposits into one account for 12 or 24 months

3.  Asset Depletion (borrower has enough reserve money to well cover

4. Property cash flows and covers less 25%

Originally posted by @Junji Yokota :

@Joe Splitroc

I have been in the business for about 4 years and business is not showing loss, about $300k-$350k annually, but I pay myself low. And I did talk to one guy mentioned about there’s lending programs uses business revenue instead but I can’t getting in touch with him. Do I just need to save up and buy it cash??

 You may take a low salary, but do you take profit distributions from the business. If the loan is in your personal name, they will want to see enough personal income to pay the mortgage. Go to a lender and fill out paperwork for pre-qualification. I wouldn't just talk to someone, apply and see what they come back with. 

@Joe Splitrock

I don’t take profit distributions I just put it back in business account. Will help if I put large down payment? It’s for my first home

Yes, commercial lenders dont look at personal income. 

@Junji Yokota  Gross tevenues don’t mean anything...one could be losing money with $1M/year in gross revenue. If the business is profitable, then profit is being shown, and taxed, somewhere...either at the corporate (C Corp) or personal level (S Corp/llc).

If the business doesn’t “show” a profit...then there “is no” profit (excluding depreciation).

Originally posted by @Junji Yokota :

@Joe Splitrock

I don’t take profit distributions I just put it back in business account. Will help if I put large down payment? It’s for my first home

 As others suggested try a commercial loan. If you want to take out a personal loan using conventional financing, you will need income. If you are not paying yourself a decent salary and not taking distributions from the business, then you have no personal income to pay a mortgage. Look at it another way, after taking out the mortgage, how do you plan to pay it each month? Are you going to increase your salary or take distributions to pay it? A business shouldn't pay personal expenses.