Step 6 – Line 6 – Schedule C Supplemental Income or Loss If there is documentation showing that this income has continued for 3 years or more it must be kept with the mortgage file. If installment payments have been received by the borrower for at least one year, this income must be considered.Step 5 – Line 5 – Form 6252 – Installment Sale Income: There must be a production of supporting documentation to verify any assets after closing that are remaining to qualify the income used in the mortgage file Any gains or losses that have only occurred only once may not be considered. Consider only gains and losses that have been consistent over a 2 year time period.Step 4 – Line 4 – Capitol Gains and Losses If there is continuing income or losses from any commissions or sole proprietorship, include these on the line.
Deduct any business expenses that have been paid by the employee, then add back any applicable depreciation.W-2 income from different sources requires separate evaluation When a self employed borrower is under evaluation, the only W-2 income that should be considered in this section would be what was acquired by self employment.Step 1 – Line 1 – Evaluation of W-2 Income
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Download Freddie Mac Form 91, also known as Income Analysis Form that is used to calculate andanalyze self employment income for the purpose of loan acquisition for a mortgage through Freddie Mac How To Write