why when you are seeing how much of a house you can afford, they want your gross income to figure out numbers? why wouldnt they use your net income, the money you actually get in a year ?
2007-05-30 13:01:51 · 3 answers · asked by rider476 2 in Business & Finance ➔ Taxes ➔ United States
Because people can manipulate their "net" income by certain deductions they can take or not take. They use gross income and then just assume what normal expenses will be on average.
2007-05-31 04:34:38 · answer #1 · answered by Ironman 2 · 0⤊ 0⤋
They don't need to know how profitable you are, mainly because most of the people doesn't know the total amount they pay in taxes nor the total expenses they have in one year.
2007-05-30 20:45:57 · answer #2 · answered by Fabio 3 · 0⤊ 0⤋
Reasonable question, but that's how many lenders do it. Doesn't necessarily make a lot of sense.
2007-05-30 20:12:48 · answer #3 · answered by Judy 7 · 0⤊ 0⤋