Tax Day Reminder: Your Clients Can Buy Without Big Tax Bills! Happy Tax Day! As we all crunch numbers today, let’s talk about something that could save your clients thousands and turn more leads into closed deals: Buyers don’t need to show sky-high income on their taxes to buy a home. Showing high income might qualify them traditionally, but it comes with a catch: hefty tax bills that could eat up their down payment savings. Why let that happen when we have options to keep their taxes low and their homebuying dreams alive? Here’s how we can help your clients buy that $800,000 home without forcing them to declare $170,000 in taxable income - which could mean $60,000 in taxes for one year or $120,000 over two! That’s practically 15% down just in tax payments. Instead, we can structure loans to use their actual earnings, leaving more cash for the down payment. Check out these four paths: Loan Options to Fit Every Buyer – Assume $800K price FHA Loan - 3.5% Down Down Payment: $28,000 Income: Needs ~$170,000 net on tax returns (2-year average). Credit Score: 580+ Details: Perfect for buyers with substantial tax-reported income and low cash reserves. Requires tax compliance. Mortgage insurance applies, but it’s a low entry point. Catch: That $170,000 income could trigger ~$60K/year in taxes - ouch! Bank Statement Loan - 10% to 20% Down Down Payment: 10% ($80,000): Qualifies. 15% ($120,000): Better rates. 20% ($160,000): Best rates. Income: Uses 75 - 90% of bank statement deposits (12 months) - no tax returns needed. Credit Score: 620+! Better scores = better rates Details: Ideal for self-employed or gig workers with strong deposits but low tax-reported income. Rates drop at higher down payments, saving hundreds monthly. Profit and Loss Statement Loan - 15% to 20% Down Down Payment: 15% ($120,000): Qualifies. 20% ($160,000): Best rates. Income: An accountant drafts a P&L statement - no tax returns required. Credit Score: 620+! Better scores = better rates Details: Great for business owners who minimize taxable income. Higher down payments mean lower rates, maximizing affordability. HomeReady or Conventional Loan - 1-Year Taxes (3% or 5% Down) Down Payment: 3% ($24,000): HomeReady, if eligible. 5% ($40,000): Conventional. Income: Uses just 1 year of tax returns (vs. 2) if they’ve got 5 years of work history and solid credit. Credit Score: 680+ Details: A game-changer for buyers with one strong tax year. HomeReady offers low rates for low-to-moderate income buyers, while Conventional works for others. Cuts tax exposure in half compared to 2-year requirements! Why This Matters Imagine your client shows $170,000 income to qualify for an $800,000 FHA loan. They might owe $60,000 in taxes for one year - or $120,000 over two if lenders demand a 2-year average. That’s money they could’ve used for a 15% down payment on a Bank Statement loan with no tax hit! By choosing options like Bank Statements, P&L, or 1-year tax loans, they keep taxes low, preserve cash for down payments, and still get into their dream home. Never Let a Lead Go! If a client says, “I don’t show enough income on my taxes,” don’t assume they’re out of luck. Whether they’re self-employed, gig workers, or just tax-savvy, we can qualify them based on deposits, P&L statements, or a single tax year. We have the expertise to structure these loans, boosting your close rate and strengthening offers with our stellar reputation. Let’s Connect Got a client who’s hesitant because of tax concerns? Send them my way! I’ll walk them through these options, answer their questions, and get them pre-approved to shop confidently. Even if they’re months out, we can plan to save them thousands later. Reply here, call me at 661-714-6258, or shoot me their details. Let’s make Tax Day 2025 the start of more deals closed together, even though Tax Day is October 15 this year in California! Please let me know if you have any questions or if a client needs my guidance. I’m just a call, text, or email away. 📞 Cell: 661-714-6258 TEXT: 661-714-6258 📞 Office: 661-260-2970 ext. 2222 📞 Direct Line: 661-291-2222 📧 Email: Mike@AugustaFinancial.com But wait, there’s more… Interest Rates I don’t like roller coasters as they make me sick to my stomach, and interest rates have been on a roller coaster ride from hell! Last week was the worst week in interest rates since 1981, but we got better yesterday and today, so we are on the way back down. Who knows when the next turn will come, and I will lose my breakfast? We offer 12-day escrows for pre-approved buyers - Conventional/FHA/Jumbo/Bridge loans. We provide loans in all 50 states, so call me with anything you need. Government loans (FHA/VA/USDA) are in the 6’s. Conventional loans up to $806,500 are in the 6s. High Balance Loans from $806,501 to $1,209,750 are also in the 6’s and 7’s. Jumbo loans above $1,209,750 are in the 6’s and 7’s. Bank statement loans are available with 10% down again, with larger down payments in the 6’s ++. Profit and Loss Statement loans require 20% down - no bank statements needed, only a profit and loss statement! 0 down loans are available in the high 6s, with a minimum credit score of 620, up to $1,300,000. Private Money lenders offer Hard Money Loans with 35% down. No Ratio Loans require 30% down. DSCR (Debt Service Coverage Ratio) loans are available with as little as 15% down. Bridge Loans typically have an interest rate of 7.99% with limited fees, helping you get where you need to go! 3/2/1 Buydowns, 2/1 Buydowns, and 1/0 Buydowns are available at great starting rates! Please note that interest rates are subject to change without notice, and the information above reflects LA County Loan Limits. **Good News for Condos:** – Nothing new! **Bad News for Condos*** Pallisades – Stevenson Ranch – Insurance and reserves are the issue there! Annadale Condos– Agoura CA – Roof repairs are needed, but there is a lack of reserves and insurance issues! The full state of California naughty list has been added to MikeMeena.com! See the link below: https://mikemeena.com/non-warrantable-condos/ Let me know if you hear anything new about condos or townhouses. I am available every day if you need anything. 📞 Cell: 661-714-6258 TEXT: 661-714-6258 📞 Office: 661-260-2970 ext. 2222 📞 Direct Line: 661-291-2222 📧 Email: Mike@AugustaFinancial.com Have a great day, and an even better tomorrow! Please call me when you have a client who needs to borrow! Mike Meena President | Loan Officer Click to Call or Text: (661) 714-6258 This entry has 0 replies Comments are closed.
