Which income calculation option provides a higher qualifying income when calculating for a Cash for Services Member?

When considering the income calculation for a Cash for Services Member, using a combination of last year's tax return and a current cash flow analysis tends to provide a higher qualifying income. This approach takes into account the most recent earnings as reflected in the tax return, while also incorporating the current cash flow, which may illustrate increased or consistent income not fully captured in the past year's tax return alone.

By using this method, the lender can account for any growth or stability in income that may not have been reflected in the last two years' tax returns. This is crucial for Cash for Services Members whose income may fluctuate based on various factors such as seasonality or project availability. Therefore, this combined approach can yield a more accurate and potentially higher qualifying income which may benefit the member in securing financing.

Other options may not capture the same potential benefits. For instance, averaging the last two years' tax returns may not accurately reflect current income trends, particularly if there has been a significant increase in income since then. The option that includes average income with added business expenses could further decrease the qualifying income, making it less advantageous. Hence, combining the last year's tax return with current cash flow is typically the most advantageous method for determining a higher qualifying income for these members.