So many people each year are left wondering WHY they can't use the income they receive from earning TIPS when after all it IS income! Well, I'm here to tell you that it is possible, so whether you're a server, bartender, hairdresser or any other profession which earns tips READ BELOW:
Claiming Tip Income
There are 2 different ways to use Tip income, one which requires 20% or more downpayment and one which requires 5%, here's an explanation:
Less than 20% Downpayment
For this, you must claim your income on your taxes, the lender will look at a TWO YEAR average of the tip income. So, when you file your taxes make sure to claim how much tip income you have used. In this scenario you can put as little as 5% down on the property you're buying!!
More than 20% Downpayment
In this case you can use as little as 6 Months worth of deposits, you don't even have to have previously claimed them on your taxes!! So, make sure to DEPOSIT your tips in your account consistently. For example: pick a day of the month or week (ie. Friday) and make sure to consistently deposit those tips. We can confirm your deposits and use this income to help you qualify!!
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What To Do Next? 😎
- Reach out to us If you are THINKING about buying or Refinancing
- Send This Info & Video to everyone you know who is buying or selling or maybe refinancing Remember: they may be thinking of a refinance, investment property OR know a friend who is currently thinking of buying.
- Send them our way and we will give them an estimate of their before and after rule pre-qualification.
- Contact us early to get ahead of the game, even if your mortgage is not up for renewal until next year.
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