Being self-employed has its advantages—flexibility, independence, and unlimited potential. But when it comes to applying for a mortgage, the process can feel a bit more complex than it does for traditional W-2 employees.
The good news? Self-employed individuals, including business owners, freelancers, and independent contractors, purchase homes every day. The key is understanding how lenders review income and what documentation may be required.
Getting a Mortgage While Self-Employed Is Possible
Self-employment doesn’t disqualify you from homeownership. Instead, it typically means you’ll need to provide different documentation to help demonstrate the consistency and stability of your income.
Lenders generally evaluate the overall financial picture—credit, income, assets, and debts—not just employment type. The focus is less on perfection and more on predictability.
What Lenders May Request
If you’re self-employed, you’ll likely be asked to provide the following:
- Two years of personal and business tax returns
- Year-to-date profit and loss statements
- Business bank statements showing income deposits
- A business license or other verification of self-employment
Depending on the type of loan and your overall profile, some lenders may average your last two years of income, while others may focus on your most recent year if income is trending upward.
Common Pitfalls to Be Aware Of
Here are a few things that could impact a self-employed mortgage application:
- Excessive write-offs: While tax deductions are helpful, they can reduce your reported income, which may affect how much you qualify for.
- Mixed finances: Using personal and business accounts interchangeably can make verifying income more difficult.
- Inconsistent income: Fluctuations aren’t necessarily a red flag, but lenders will want to understand the context—such as seasonal work or temporary drops.
Preparing your documentation ahead of time and keeping finances organized can help keep the process smoother.
Loan Options for Self-Employed Borrowers
There’s no one-size-fits-all mortgage—especially for self-employed buyers. At Supreme Lending, we offer a variety of solutions depending on your needs, which may include:
- Bank Statement Loans – Use deposit history instead of tax returns to document income
- 1099-Only Programs – Designed for contractors and freelancers
- Asset-Based Loans – Leverage liquid assets to help meet income requirements
- Standard FHA and Conventional Loans – These may still be an option with full documentation
Program availability varies, so it’s best to speak with a licensed loan officer to explore what’s available for your scenario.
Let’s Talk About What’s Possible
Owning a home while self-employed isn’t out of reach—it just requires the right plan and support.