Technical training courses
Evaluating the Self-Employed Borrower (SEB)
Typically, 1 out of 10 borrowers is self-employed. Take advantage of the opportunity these borrowers represent by learning how to determine their cash flow. As business owners, the self-employed borrower's (SEB) goal is to maximize income and earning potential while reducing their tax liability. In order to achieve that, however, they often decrease their reported income, making qualifying for a loan more challenging.
Select from the sessions below to create a comprehensive workshop that works best for your team. Together, we’ll dig deeper through personal and/or business tax returns to develop a clear picture of your SEB’s monthly cash flow and overall financial standing.
Who should attend:
Processors, underwriters, loan originators
Session 1: Self-Employed Borrowers – Focus on Getting Started & the Sole Proprietor
We'll walk through the fundamentals of using tax returns as documentation of your borrower's qualifying income and cover these basic questions: When do I need tax returns? Why do I need them? What do I look at when I receive them?
Whether you're new to analyzing tax returns or looking for a refresher, you'll gain the critical skills that mortgage teams need — from assistants to underwriters.
Learning objectives:
- Review personal and business tax return forms and schedules
- Identify documentation required for various types of business structures
- Calculate qualifying income for a sole proprietor using the Schedule C
Approx. length:
Classroom – 60 to 90 minutes
Virtual – 60 minutes
Session 2: Self-Employed Borrowers – Focus on Partnerships & S Corporations
Once you've learned the basics of building qualifying income from the tax returns of self-employed borrowers, you'll be ready to take your knowledge to the next level with this session that zeroes in on evaluating partnerships (Form 1065) and S corporations (Form 1120-S).
Learning objectives:
Regardless of whether your SEB's business is a partnership or S corporation, we'll teach you how to document, calculate and analyze the following:
- Percentage of ownership and the impact on required documentation
- Stability of K-1 income by evaluating distributions and/or liquidity
- Impact of mortgage and notes payable in less than 1 year on qualifying income
- Income trends year-over-year and year to date
Approx. length:
Classroom – 60 to 90 minutes
Virtual – 60 minutes
Session 3: Self-Employed Borrowers – Focus on Corporations & Financial Statements
Heads up: This course assumes you are comfortable building income from tax returns. This intermediate session drills into business financials within files. Bring your questions and experience!
Learning objectives:
- Discuss the corporation (Form 1120) and how it’s different from other business structures
- Highlight special considerations when using income from the corporation for qualifying
- Break down the sections of the balance sheet and the income statement
- Identify other trend ratios that can assist in evaluating business stability
Approx. length:
Classroom – 60 to 90 minutes
Virtual – 60 minutes
Note: The business tax return analysis course assumes an understanding of the basic fundamentals for analyzing tax returns, such as recurring vs. nonrecurring income/loss, depreciation, noncash expenses, etc., and how they affect cash flow.
Interested in this training opportunity?
Get in touch with your MGIC representative or complete our specialized training kickstarter form to get the ball rolling.
You might also like
-
MGIC’s on-demand and recorded webinars
Training resources include nearly 50 on-demand sessions, as well as live and special event webinars.
-
Never miss a training opportunity
Encourage your team to subscribe for our monthly training calendar updates.
-
Your specialized training team
Get to know the pros delivering essential industry knowledge to you and your team.