Calculations of Self Employed Income For Full Doc loans - BankerBroker.com California Home Loans, Mortgage Refinance, No Doc Mortgages, VOE programs Call 1(877)410-MONEY

Self-Employment Income.
Net income from self-employment shall be based on the previous two years Federal tax returns in addition to, if available, current years income and expenses. Self-employment income can be calculated as follows:

A two year average of the net profit (item # 31 on 1040 Schedule C or item # 36 on 1040 Schedule F) typically serves as self-employment income for loan purposes. In addition, it is permissible to add back to the net profit certain deductible items, specifically:

Depletion (item # 12 on Schedule C);
Depreciation (item # 13 on Schedule C, or item # 16 on Schedule F);
Interest (items #16a and #16b on Schedule C, or items # 23a and # 23b on Schedule F)