Question 1

How long do I need to be self employed?

Accepted Answer

Two years is the common benchmark, though some programs consider shorter histories with related prior experience. Requirements vary by program.

Question 2

Which is better, tax returns or bank statements?

Accepted Answer

Whichever produces qualifying income that supports your goal at the lowest total cost. Full documentation is usually less expensive when your net income supports the payment; bank statement pricing is higher but the qualifying income is often much larger.

Question 3

Can I get a mortgage if I am self employed?

Accepted Answer

Yes. Self employed borrowers use the same programs as everyone else, plus alternative documentation options when tax returns understate cash flow.

Question 4

How do mortgage lenders calculate self employed income?

Accepted Answer

With full documentation, income is averaged from your business and personal tax returns, with certain add backs such as depreciation. Consistency and business stability matter as much as the totals.

Question 5

What is a Bank Statement Mortgage?

Accepted Answer

A program that derives qualifying income from deposits over a set number of months, applying an expense factor, instead of using tax returns. See the bank statement mortgage page.

Question 6

Can I qualify using bank statements instead of tax returns?

Accepted Answer

On eligible bank statement programs, yes. Credit, reserve and down payment requirements are typically higher than full documentation financing.

Question 7

How many months of bank statements may be required?

Accepted Answer

Commonly twelve or twenty four months, depending on the program and how income is calculated.

Question 8

Can business bank statements be used?

Accepted Answer

Yes on many programs, usually with an expense factor applied or a documented profit and loss statement. Personal statements are also an option when business income is deposited there.

Question 9

What if my tax returns show significant business write offs?

Accepted Answer

That is the most common reason a self employed borrower qualifies for less than expected on full documentation. A bank statement or profit and loss program may reflect cash flow more accurately.

Question 10

Can 1099 borrowers qualify for a mortgage?

Accepted Answer

Yes. Some programs qualify directly from 1099 totals with an expense factor, which can be simpler than a full return analysis.

Question 11

What documents should a self employed borrower prepare?

Accepted Answer

Business license or entity documents, recent personal and business tax returns, recent business and personal bank statements, a year to date profit and loss statement, and asset statements for down payment and reserves.

Self Employed Borrowers

Who this is for

How the process works

Compare qualification methods

Get your entity documentation in order

Keep deposits clean

Common mistakes

Loan programs that apply

Bank Statement Mortgages

Conventional Loans

No DTI and Asset Acquisition Mortgage

DSCR Loans

Jumbo Loans

Frequently Asked Questions

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