CPA or tax professional in Tennessee Please help!!
I am looking for a CPA or tax professional in the Nashville, TN area. I met with one CPA and she sat down with me for free to just discuss my situation but I would be the first adult entertainer she has done taxes for. Im on the fence about going to this lady because she said something odd: I talked to her about my goal of purchasing a home She said that I would not be able to get a mortgage as a dancer and I told her that I know other dancers that were able to get mortgages as dancers and she backed up a little and said maybe I spoke too soon. Also she said something that I felt was odd that I should save up for like more than 20% like actually saving up to purchase a home out right like $70,000 like that to me just doesn't make since.:-\
Re: CPA or tax professional in Tennessee Please help!!
^^^ actually, with recent changes in banking regulations, this CPA is probably more right than wrong. One of the recent changes in banking regulations is a requirement that lenders evaluate the would-be borrower's 'worst case' ability to repay. Where exotic dancers are concerned, lenders realize that the odds of a dancer still being able to work / earn good money as a dancer 30 years down the road are fairly slim, while the mortgage payments will still need to be made.
Savvy lenders also realize that 'local market' dancer earnings are also tied to local laws etc. Thus the passage of a new local law banning contact with club customers could cut 'local market' dancer earnings overnight, while the mortgage payments will still need to be made.
These days, to have a serious chance at being approved for mortgage financing, at minimum the dancer would need to have 20% down money plus 5% closing cost money saved up from a 'documented' source ( i.e. reported income with taxes paid, as can be 'verified' by the dancer's 1040 tax returns ). Beyond that, the term of the mortgage probably cannot exceed 15 years ... which is the 'reasonable' limit in regard to how long a dancer can be expected to continue working / earning good money.
Off the cuff commentary from an acquaintance in the banking business tends to indicate that, for a dancer to successfully gain approval for a 30 year mortgage these days, that dancer must have some additional 'credentials' which would lead the lender to believe that, after retiring from dancing, the girl was qualified for some 'straight' job that was likely to provide a similar income level. This typically means a college degree in a 'high demand' field.
Obviously, the term lengths of leases, auto loans, etc. are much shorter than the dancer's expected 'career' length, thus the issue doesn't come up.
I also agree that, given the income potential of a serious, professional dancer ... given the degree of 'mistrust' regarding the banking industry and any aspect of the 'sex industry' ... and given the additional interest and insurance costs involved for a mortgaged property ... saving up for a 'cash' purchase is certainly do-able, and will save the home buyer a LOT of money over the years. And this is especially the case if the lender is going to automatically classify any exotic dancer or camgirl as a 'subprime' borrower due to their association with the 'sex industry', resulting in a higher interest rate being charged.
Re: CPA or tax professional in Tennessee Please help!!
Well I finished LPN nursing school and Im studying for my NCLEX right now. I Plan on going back to school in the fall to work on getting my RN.
Re: CPA or tax professional in Tennessee Please help!!
^^^ once you have your RN degree and professional license, mortgage approval should no longer be a problem.
Re: CPA or tax professional in Tennessee Please help!!
If you know other dancers that were able to get mortgages, I suggest talking to them to find out how much they had to put down and where they got their mortgage from.
Re: CPA or tax professional in Tennessee Please help!!
Thanks for the advice, I feel like this is the hardest thing that I have ever done. I Want a House soooo bad I sit and look at pictures for hours, this is going to happen for me. Im going to make an appointment tomorrow at my bank to see if they can do anything for me.
Re: CPA or tax professional in Tennessee Please help!!
I believe it's 10% minimum and 20% preferred. Make sure the CPA is licensed, and not just a candidate to be a CPA who has passed the tests/sections.
Re: CPA or tax professional in Tennessee Please help!!
Karmalita, please share with us the results of your meeting with your bank's mortgage officer ...
Re: CPA or tax professional in Tennessee Please help!!
Will do Melonie, I have an appt Monday at 12
Re: CPA or tax professional in Tennessee Please help!!
Re: CPA or tax professional in Tennessee Please help!!
Well things didn't go so well today smh:( basically I went into the bank spoke with the banker explained to him my situation. He said it seems like I would be a good canadide, he then gets the mortgage broker on the phone and she asked me about my tax return and did I "gain or did I have a loss" like what the fuck is that suppose to mean? are you asking me am I going to have to pay or what? then she said that since it's a cash business and I didn't have a check stub that it would be difficult then I told her well since I bank with you guys and Im making cash deposits for x amount of money and proving to IRS that I'm making money?????? I'm confused I want to cry but I'm not giving up.
Re: CPA or tax professional in Tennessee Please help!!
^^^ to understand what just happened, you need to remember back to the mid 2000's ... when mortgage lenders were approving 'subprime' mortgages, 'NINJA' mortgages ( No Income No Job At all ), 'stated income' mortgages ( where people could 'state' any income they wanted without proof ) etc. This resulted in huge losses for the mortgage lenders ( imagine that LOL !!! ), and cost US taxpayers untold billions to bail out the lender banks. Adopting a 'never again' mindset, new financial regulations were enacted in an attempt to accurately assess the financial details for future mortgage borrowers. One of these new regs involves 'income verification' ... which must prove via 3rd party documentation that the person actually receives the income that they claim to receive. Another one of these new regs involves a 'stress test' to determine how able the person may actually be to continue making 15-30 years worth of ongoing mortgage payments.
Where dancers and camgirls are concerned, with rare exceptions they are self-employed independent business operators. The only 100% authoritative 'proof of income' for their business is the Schedule C filed along with previous years' tax returns. When the mortgage underwriter asked whether you had a 'gain or a loss' he was referring to the final number on your Schedule C. For dancers and camgirls, this final number is usually a way positive gain ... however other types of businesses filing Schedule C may indeed show a loss due to high business equipment spending, buying a new company vehicle, or many other reasons. So not knowing that you work as a dancer or camgirl, the mortgage underwriter had to ask.
Where 'income verification' is concerned, regular cash deposits made to a bank account don't automatically qualify as income. During the heyday of 'subprime' mortgage loans, it was not unknown for certain UN-qualified mortgage applicants to borrow money from another source, to gradually deposit that borrowed money into a bank account, and to then attempt to 'sell' a mortgage lender on the idea that those regular deposits were in fact income. Today's regs require some 3rd party corroboration that such deposits actually come from business earnings, as opposed to coming from a sugar daddy / loan shark / family member / other bank loan etc. 3rd party corroboration means past year tax returns, check stubs from webcam hosts, etc. Under today's regs, undocumented 'cash' income doesn't officially exist, thus can't comprise official 'proof of income', even if regular 'cash' deposits are being made to a bank account.
In regard to the 'stress test', lots of different things factor into this. One aspect of particular concern to dancers and camgirls is the 'longevity' of their business / earnings potential. Or, put bluntly, mortgage lenders understand that dancers and camgirls who are earning perhaps $75k per year today are NOT likely to still be able to earn that same amount still working as dancers or camgirls when they reach age 50 ... yet the same monthly mortgage payment must still be made on a 30 year mortgage. Mortgage lenders also realize that, statistically speaking, 'adult' businesses have a very poor record for financial stability ... and also face elevated risk that a change in future laws could render their currently profitable business model a loser. And in some cases, mortgage underwriters simply choose not to do business with 'adult' businesses for business reputation reasons.
If you don't want to wait until the point where you can apply for a mortgage as a licensed health care professional with an official 'employer' and official 'pay stubs' with ( estimated ) taxes withheld, to improve your chances of obtaining mortgage financing as a dancer or camgirl you need to work on the following ...
- credit score needs to be above 720 ... preferably 750+
- minimum two consecutive years worth of filed IRS tax returns showing the amount of your 'official' business income as a camgirl or dancer as reported on Schedule C
- 25-30% of the purchase price of the house you wish to finance already being saved up and sitting in a bank / investment account, to cover a 20% down payment plus closing costs plus insurance .
Re: CPA or tax professional in Tennessee Please help!!
I heart you Melonie! thanks for replying I called another broker today and he took my information so hopefully he calls me back tommorow.
Re: CPA or tax professional in Tennessee Please help!!
^^^ I wish you the best of luck. However, even if you present yourself as operating an 'internet sales' business with very positive Schedule C business income, this is still likely to be an 'uphill battle'.