Back in the mid-eighties, my spouse and I were both self-employed and wrote off a lot of our income. I told our CPA at tax time that we wanted to buy our first home but were afraid we wouldn’t qualify. He said, “Here’s how a lot of people do it — they have two sets of tax returns made — one for lenders and one for the IRS. I recommend it.” This shocked me. We ended up not buying till one of us got a regular W-2 job. I think this is why nowadays, as it says in a link that another poster offered earlier in the thread, lenders often require that the IRS provide the tax return, not the borrower.
Rustico–
I think you are right that the caller to Aram probably didn’t have enough in reserves. I forgot to mention in my original post that the caller said he and his wife both have excellent credit, so I am assuming FICOs of at least 700.
