 TITLE: How to Calculate Self-Employment Income CONTENT: ### What if Your Reported Income Seems Too Low?\nMany taxpayers maximize their deductible expenses to lower their tax bills. That's great at tax time, but it minimizes your reportable income when you apply for a loan; lenders count the income you report on your taxes. If your monthly income turns out to be lower than you expected, consider these steps:\n*   **Include other sources of income.** Although the Credit CARD Act of 2009 limits the types of income you can include on a credit application, if you have any of the following, you may be able to include them in your stated income:\n*   Employment earnings\n*   Investments\n*   Retirement\n*   Public assistance\n*   Insurance payments\n*   Your spouse's earnings\n*   Alimony and child support\n*   Some financial aid\n*   **Limit your loan size.** Calculate a debt-to-income ratio that your lender will approve and reverse-engineer your loan. You may decide to buy a less expensive home or increase your down payment to lower your loan amount.\n*   **Look for a sympathetic lender.** Some lenders, for example, will review a few years' worth of bank statements to determine your income instead of relying on tax returns. This may play to your favor, though it may also cost you more in interest. An experienced mortgage broker can help you find lenders and loan programs that work best for your situation.\n*   **Build your business now and apply later.** Now may not be the best time to apply for a home loan. If your income took a hit during the pandemic or your business is just getting started, you may want to wait a year or two to let your income grow and then restart your home search. END