Do lenders use Total Income, AGI or Taxable income for a refi for self-employed people? – Piggington's Econo-Almanac

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October 9, 2012 at 2:42 AM #20177

joec
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Do lenders use Total Income, AGI or Taxable income for a refi for self-employed people?

Obviously, these can vary widely with huge retirement plan contributions and itemized deductions.

I’ve read of all 3 from all my searches.

October 9, 2012 at 7:51 AM #752347

SK in CV
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None of the above. Usually it’s net business income, plus income from other sources, if applicable. If you’re looking for a line on a tax return, it should be similar to total income (which may be very different from gross income). Underwriters will sometimes allow for adjustments to net business income if the borrower can provide a convincing argument that the adjustments are warranted.
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