Can I exclude existing debts listed on my credit profile if my business pays for the debt each month?

This is a very common question for self-employed borrowers who are trying to qualify for a home mortgage loan. For example, a borrower who got a loan for a truck in their own name, but pays for the truck using money from their business, may think they don’t have to include the debt in their application because their business pays for the debt. This is true for certain mortgage products; however, you will need to produce a great deal of documentation for a lender to agree to omit these debts in order to get approved for a mortgage. See below:

• Fannie Mae (Conventional): Allowed (with 12 months cancelled checks, CPA letter and business returns showing the debts are expensed through your business).
• Freddie Mac (Conventional): Allowed (with 12 months cancelled checks, CPA letter and business returns showing the debts are expensed through your business).
• FHA: Allowed (with 12 months cancelled checks, CPA letter and business returns showing the debts are expensed through your business).
• USDA: Contact a mortgage expert for more info.
• VA: Contact a mortgage expert for more info.

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To learn more about specific mortgage requirements, be sure to speak with an experienced mortgage broker.