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Buying or Selling a Home/trucker tax deduction prohibits home purchase

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Expert: John Hendricks - 8/23/2008


Question
I am a commercial driver {trucker} and the IRS allows a tax deduction of 53 dollars a day for food consumed while deployed over the road.Naturallly we don't spend nearly that much,but it is a welcome perk come tax time.The problem is that recently while trying to close on the home of our dreams,the mortgage lender categorized this deduction as a debt and refused to finance the transaction.

Answer
Dear Jonathon:

Thank you for your question….

As you have probably heard on the news and read in the paper, the subprime mortgage market has dissolved. Since you are considered an independent contractor, (self employed) that type of mortgage was great. I am also an independent contractor and enjoyed the same loan for myself over the years.

Since the subprime market is no longer an avenue for a loan for the self employed, you have to submit a fully documented file including your tax returns to verify your qualifications. Unfortunately, investors look closely at your actual income and expenses to determine your qualifications. If you have a lot of write offs on your tax returns, including the travel deductions, it will affect your net and qualifications for the loan. They go by ratios and if the ratios do not reflect the ratio they need to qualify you for a loan, then you are refused the financing needed to qualify for a loan.

If you went to the bank for your loan, in the industry they are considered one dimensional and will provide you with their loans alone. They will not shop your loan around to get you the best rate. On the other hand, a good mortgage broker will shop your loan, and will provide you with options that may meet your needs including an FHA loan.

There are a number of loan programs available for you to consider including the revised FHA loan program for 1st time home buyers, or have not owned a home within the last 3 years. If you forward your email to me through my email at JohnHendricks@Marin1.com, I will forward you a copy of the guidelines. I can not attach files through AllExperts.com. FHA is also allowing a $7500.00 tax credit that can be repaid I believe over a 15 year time period interest free. It would be worth your while to check that out. I would recommend you contact the 2 of the best Mortgage Brokers you can fine in town. Just ask your Realtor for the names, but once you contact them, do not allow them to check your credit until you decide on which mortgage broker you want to use. Each time they check your credit your fico credit score deducts points from your overall score. If you know your current Fico score, you can pass that score onto them which help them determine what programs will be best suited for your situation. After interviewing the brokers to determine which one can help you to your satisfaction then allow the chosen one to run your credit. You may want to ask the broker to look at an adjustable rate loan for you as well.  

I am sorry that you are running into this situation… I understand completely as like I mentioned, I’m confronted with the same problems…

Good Luck...

Warmest Regards;
John Hendricks  

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John Hendricks

Expertise

As a California Realtor for 23 years practicing in Marin and Sonoma Counties, it is now time to provide counsel through AllExperts.com to those who need advise in real estate. My knowledge and experience includes a wide range of resale residential real estate purchases, new home sales, income related investment properties involved in 1031 exchanges, and land. Let me help you in any of these areas...

Experience

John Hendricks has established himself as one of Marin & Sonoma Counties premier Realtors. A native Californian, John is a well-known and respected Realtor in both Marin & Sonoma Counties who has resided in the Northbay since 1976. John began his real estate career in 1986, and since then has distinguished himself as one or Northern California's top producing Realtors. Before joining Frank Howard Allen Realtors, John was an associate of the Prudential California Realty from 1990-1992 where his outstanding sales achievements earned him one of the company's highest honors, the prestigious "President's Circle Membership", presented to the top 2% of associates for sales and earning excellence. Since his association with the highly regarded Frank Howard Allen Realtors in 1992, John has once again established himself as one of his company's Top 10 Producing Realtors in Marin & Sonoma Counties for the years 1993 through 2007 and now in 2008. Five continuous years of outstanding performance has now allowed John to join 15 other Realtors in the prestigious "Lifetime Hall of Fame" for Frank Howard Allen Realtors. John established a group of professional individuals who specialize in a variety of areas in real estate called, 'Lundmark-Hendricks Fine Homes' This group of professionals are dedicated to the success of representing clients with the greatest amount of care and service when either buying or selling real estate.

Organizations
California Association of Realtors National Association of Realtors

Education/Credentials
Upon Request...

Awards and Honors
Frank Howard Allen Realtors "Hall of Fame Member" Chairman's Circle for 10 consecutive years

Past/Present Clients
Joe Louis & Sharon Sigurdson We want to thank you again for your excellent representation of interests during the recent purchase of our home in Petaluma as well as the sell of our home in Mill Valley. We had the unusual pleasure of working with you during the last year both as sellers and buyers. We felt that our interests were always paramount and that we received a very fair price for the sale of the Mill Valley house as well as our purchase of our new home. This speaks particularly well of you, because of the recent unstable and chaotic real estate market. Will Finke "Quite frankly, we came out of a very difficult situation, which time does not allow elaborating on. This was one of the greatest experiences of our lives as clients. John Hendricks is one of the top businessmen I have ever met." Bruce & Nancy Rosentreter "I chose John Hendricks to sell my house. I picked him because I thought he was professional, aggressive, and that he could get top dollar for my house. He fulfilled my expectations completely." Joy Schuelke "Since we were trying to sell a high end home in a very tough market, and in the middle of a very rainy winter, the prospects seemed quite bleak. I was convinced at the time, and am even more so now, that without John's tenure, patience, and tenacity, we would have not been able to move the property." Lynn McCarthy "I cannot stress strongly enough how impressed I was with the service provided to me by John and his group. Throughout the entire transaction, John was always available, always forthcoming with excellent advice based on his years of experience, and always willing to put in the extra effort to make this a positive experience for me. I feel lucky to have had the experience of working with him." Lea Lieurance-Turk "Thank you John for your outstanding real estate services for the past 5 years I have known you. You have made my dreams come true as far as selling and buying property."
http://www.LundmarkHendricksFineHomes.com

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