As it turns out, for Self-Employed Clients, year-to-date earnings are only factored in for loan approval when year over year income is decreasing.
This means that the income reported on your past two years of IRS tax returns is the only income that is calculated for loan approval.
However, there are exceptions where only the most recent year of filed IRS tax returns is calculated for income qualification which can be very helpful when the most recent years income is higher than the previous year (as was the case with you in 2022 vs 2021).
The only way to find out if this is possible is by fully applying, having your credit checked, and processing your loan through AUS, an internal loan approval software used by all mortgage lenders and banks.
To find out whether one or two years of your IRS returns are required, you can apply today and it usually takes us lenders about 2 – 4 hours to determine this.
