Business owners
Of about 5,100 employed residents, about 620, roughly one in eight, work in their own incorporated business, and about 390 more in an unincorporated business of their own or as unpaid family workers.
Franklin Lakes, Bergen County
Mortgages for business owners in Franklin Lakes, NJ
For Franklin Lakes buyers and homeowners who own a business: how a lender reads personal and business tax returns, what it adds back, how income from an S corporation or partnership counts, and the other ways to document income. Fidelity Residential is a direct, licensed mortgage lender with a New Jersey office on Route 36 in West Long Branch, in Monmouth County, and we lend across New Jersey.
- Direct, licensed mortgage lender
- NMLS #103098
- Equal Housing Lender
Where do you stand?
Pick the closest, or call and talk it through.
Fidelity Residential · NMLS #103098 · Equal Housing Lender
Franklin Lakes housing and work
Larger houses, and many owners of a business
The Census Bureau’s American Community Survey, in its estimates for 2020 to 2024, counts about 11,100 residents in the borough of Franklin Lakes and about 3,900 homes. Owners live in nearly nine occupied homes in ten, an estimated 88.9 percent.
By the Census estimate, the median value of owner-occupied homes is about $1,264,000, and about two in three of them, an estimated 65.4 percent, are valued at $1,000,000 or more.
Five bedrooms or more
An estimated 35.6 percent of homes have five or more bedrooms, and 53.8 percent have nine rooms or more.
Mostly since 1960
About 88 percent of homes were built in 1960 or later, and about 27 percent in 2000 or later.
Mortgages
Of about 3,400 owner-occupied homes, an estimated 67.1 percent have a mortgage.
Source: US Census Bureau, American Community Survey 5-year estimates, 2020 to 2024. Estimates, not counts.
Fidelity Residential is a direct mortgage lender licensed in New Jersey under a Residential Mortgage Lender License. Our office is at 121 NJ-36, Suite 230, West Long Branch, in Monmouth County; we do not have an office in Franklin Lakes, and we lend across New Jersey.
Tax returns
How a lender reads a business owner’s tax returns
On a loan documented with tax returns, the lender does not start from what the business takes in. It starts from the income left after write-offs, averages recent years, and then adjusts in two directions.
Added back. Non-cash items lower taxable income without taking cash out of the business, so they generally come back into the income the lender counts. Depreciation is the familiar one; on most programs depletion, amortization and casualty losses are treated the same way. Part of a business mileage deduction, the part that stands for wear on the vehicle, is often added back too.
Left subtracted. Cash that really left the business stays out: recurring operating costs, and meals, travel and supplies that were actually paid for. A large deduction of that kind lowers the tax bill and the usable income at the same time.
The order of the years. Because recent years are averaged, a strong year cannot fully make up for a weak one, and when the latest year is the lighter one, some programs use that lower figure on its own.
An incorporated business
Income from an S corporation or a partnership
Profit from an S corporation or a partnership reaches you on a K-1. A lender often counts it to the extent it was actually paid out to you, or the business can show it has the cash to pay it. Earnings you are taxed on that stay in the business may not count toward the loan at all.
That makes the business’s own returns part of your file, read alongside your personal ones. Expect to send both, with every schedule.
What to have ready
- Personal returns: with every schedule
- Business returns: the company’s own returns, if it files them
- This year so far: a profit and loss statement for the business
- Bank statements: recent business statements, every page
- The business itself: its license or formation documents
- Deposits: a short note on any large or unusual deposit
Do not change your business structure just before you apply.
Timing
Talk to a loan officer before the return is final
If you may buy or refinance soon, bring a loan officer and your CPA together before your next return is final, not after it is filed. A short conversation then shows how the draft return will read in a loan file while there is still time to understand the trade-offs.
How to file stays your CPA’s decision. What we can show is how a lender reads the result; this is general information, not tax advice.
Two habits that help. Keep business and personal money in separate accounts, and open no new credit once the process starts.
Other routes
When the returns show less than the business earns
If a standard loan read from your returns does not fit, other programs read your income another way. Each has its own rules, and income, credit, savings and the home are still verified.
Bank statement loans
Income is worked out from the deposits in your statements, with transfers and other non-business money taken out and an allowance made for business costs.
Bank statement loansProfit and loss loans
A profit and loss statement prepared and signed by an independent tax professional stands in for the returns.
Profit and loss loansAsset-based loans
Verified savings and investments can be counted as income, in place of or alongside what the business pays you.
Asset-based loans in New Jersey
Questions
Questions from Franklin Lakes business owners
Do you lend in Franklin Lakes?
Yes. Fidelity Residential is a dba of PFN Lending Group, Inc. (NMLS #103098), which holds a New Jersey Residential Mortgage Lender License, and we lend across New Jersey. You can check the licence on NMLS Consumer Access (opens in a new tab).
Do you have an office in Franklin Lakes?
No. Our office is at 121 NJ-36, Suite 230, West Long Branch, NJ 07764, in Monmouth County, and we lend across New Jersey. Call 732-686-9999 to talk with a licensed loan officer.
Does a lender use my gross receipts?
No. On a loan documented with tax returns, it starts from the income left after write-offs, averages recent years, then adds back non-cash items such as depreciation.
Does K-1 income from my S corporation count?
Often to the extent it was paid out to you, or the business can show it has the cash to pay it. Earnings that stay in the business may not count.
My latest year was lower. What happens?
Recent years are usually averaged, so a strong year cannot fully offset a weak one. When the latest year is the lower one, some programs use that figure on its own rather than the average.
Do I need tax returns at all?
Not always. A bank statement loan, a profit and loss loan or an asset-based loan can take their place. If your returns already show your income well, a standard loan using them is often the simpler path.
Talk with a loan officer near you
Get a quote online, or call us and talk it through with a licensed loan officer.
What happens next
- Tell us about your loan. A few quick questions about the property and the loan you want. No credit check to start and no obligation.
- A licensed loan officer reviews your answers and follows up with you, usually within one business day.
- This is a request for a quote, not a loan application and not a commitment to lend.
This page is general information, not a commitment to lend. Programs, terms and eligibility depend on credit, income, property and underwriting review and are subject to change without notice.
Reviewed by Robert Shamie, CEO, NMLS #241428 · Last reviewed:
Fidelity Residential (PFN Lending Group, Inc., NMLS #103098) is a direct mortgage lender licensed in 40 states and the District of Columbia, with 26 years in business.