Intro

If you're self-employed, you've probably heard, "It's harder to get a mortgage." What's really true is this: lenders just have to work a little harder to understand your income. With the right preparation, you can absolutely qualify.

1. Tax Returns Tell the Story

Instead of pay stubs, lenders rely heavily on your last two years of tax returns. They look at:

Net income after expenses
Add-backs like depreciation and certain one-time expenses
Consistency or growth year over year

If your income goes up and down, a broker can help calculate an average that still works.

2. Keep Business and Personal Finances Clean

Separate business and personal accounts make your file much easier to underwrite. Be ready to provide:

Business bank statements
Profit and loss statements (if requested)
Any K-1s or partnership documents

3. Explain the Story Behind the Numbers

If you had a dip in income because you invested in new equipment, had a temporary shutdown, or changed your business model, a short written explanation goes a long way. Your broker can help you frame it clearly.

4. Programs Designed for Self-Employed Borrowers

There are more options now than in the past, including:

Bank-statement programs (qualifying using deposits instead of tax returns)
Investor-friendly programs for rental properties
Flexible documentation options for certain borrowers

A broker who regularly works with self-employed clients knows which investors are most flexible.

Closing Thought

Don't assume you can't qualify just because you don't get a W-2. Start a conversation early, review your tax returns together, and build a plan that lines up with your home-buying goals.

Self-Employed and Buying a Home: What Lenders Really Look At