Getting a Mortgage When You're Self-Employed

Business owners, contractors, cleaners, drivers, stylists and other self-employed people buy homes every day. The process just asks for more paperwork, and the way you file taxes matters.

How lenders look at your income

• Most standard loans use your tax returns, often the last two years, and look at income after business expenses.
• Write-offs lower your taxes, but they also lower the income a lender can count. Plan ahead with your tax preparer if you want to buy soon.
• A steady or rising income over time helps. A big drop may need an explanation.
• Some lenders offer bank statement loans that use 12 to 24 months of deposits instead of tax returns. They usually need a larger down payment and cost more.

Documents to gather

• Personal and business tax returns, with all schedules.
• Business license or registration, or a letter from your accountant.
• Recent business and personal bank statements.
• A year-to-date profit and loss statement.

Tips

• Keep business and personal money in separate accounts.
• Avoid large, unexplained cash deposits before you apply.
• Talk to a lender months before you want to buy, so there's time to fix anything.

We work with lenders who understand self-employed buyers, in English and Spanish. This article is general information, not financial or tax advice; your lender and tax preparer confirm what applies to you.