Being self-employed doesn’t mean you have to take a one-size-fits-all approach to mortgage financing.
GuardHill Financial specializes in working with self-employed borrowers, business owners, entrepreneurs, and independent professionals whose income and financial profiles may be more complex than those of traditional salaried borrowers.
Whether you’re purchasing or refinancing a primary residence, second home, or investment property, our mortgage professionals can help determine the most appropriate way to document your income and qualify for financing.
How Do Self-Employed Borrowers Qualify for a Mortgage?
Self-employed borrowers can qualify for many of the same mortgage programs as salaried borrowers. The primary difference is how income is documented and calculated.
Because business owners often have deductions, multiple sources of income, ownership in different entities, or income that fluctuates from year to year, determining qualifying income can require a more detailed analysis.
Depending on the borrower and loan program, GuardHill offers multiple ways to qualify.
Traditional Income Qualification
Self-employed borrowers may qualify using personal and business tax returns along with other applicable financial documentation.
The lender will generally analyze the borrower’s business income, ownership percentage, expenses, and other factors to determine the income that can be used to qualify for the mortgage.
Bank Statement Loans
For business owners whose tax returns may not fully reflect their available cash flow, a bank statement loan can provide an alternative method of qualification.
Depending on the program, borrowers may be able to use personal or business bank statements to establish qualifying income rather than traditional tax returns.
This can be particularly useful for self-employed borrowers who have significant legitimate business deductions that reduce their taxable income.
Understanding Self-Employed Income
Qualifying income for a self-employed borrower is not always as simple as looking at the income reported on a tax return.
Depending on the business structure and loan program, a lender may consider factors such as:
- Personal and business tax returns
- Profit and loss statements
- Business ownership percentage
- W-2 or K-1 income
- Business cash flow
- Personal or business bank statements
- Other sources of qualifying income
GuardHill’s experience with complex income allows our mortgage professionals to evaluate a borrower’s complete financial picture and determine which qualification method may be most appropriate.
Self-Employed Mortgage Options
Depending on the program and borrower qualifications, financing may be available for:
- Primary residences
- Second homes
- Investment properties
- Single-family homes
- Condominiums
- Co-ops
- 2–4 family properties
- Purchase transactions
- Rate-and-term refinances
- Cash-out refinances
- Jumbo mortgages
Why Work With GuardHill as a Self-Employed Borrower?
Self-employed mortgage financing can require a more detailed understanding of business income, tax returns, cash flow, and complex financial structures.
With more than three decades of mortgage financing experience, GuardHill specializes in working with self-employed borrowers and business owners whose financial profiles may require a more customized approach.
Rather than relying on a single method of qualification, our mortgage professionals can evaluate whether traditional income documentation, bank statements, or another available program may provide the most appropriate financing solution.
Frequently Asked Questions About Self-Employed Mortgages
Is it harder to get a mortgage if I am self-employed?
Not necessarily. Self-employed borrowers can qualify for many of the same mortgage programs as salaried borrowers. However, documenting and calculating income can be more complex, particularly when a borrower owns a business, has significant deductions, or receives income from multiple sources.
How is self-employed income calculated for a mortgage?
The calculation depends on the loan program and the borrower’s business structure. For traditional qualification, lenders may review personal and business tax returns and make certain adjustments to determine qualifying income.
Alternative programs may allow borrowers to qualify using bank statements or other eligible documentation.
How many years of tax returns do I need?
Documentation requirements vary by loan program and borrower profile. While certain programs require tax returns, others may require less traditional documentation or allow borrowers to qualify without tax returns altogether.
Can I get a mortgage without providing tax returns?
Yes. Certain mortgage programs may allow qualified self-employed borrowers to use personal or business bank statements or other alternative documentation instead of traditional tax returns.
What is a bank statement mortgage?
A bank statement mortgage allows eligible self-employed borrowers to use deposits or cash flow reflected in personal or business bank statements to help establish qualifying income.
This can be useful when taxable income does not accurately reflect the borrower’s available cash flow.
Can business bank statements be used to qualify?
Yes. Certain programs allow self-employed borrowers to qualify using business bank statements. How deposits and business expenses are evaluated will depend on the specific loan program.
Can I qualify if I have multiple businesses or sources of income?
Yes. Self-employed borrowers frequently have income from multiple businesses, investments, rental properties, or other sources. Depending on the program, multiple eligible income sources may be considered when determining qualification.
Can self-employed borrowers get jumbo mortgages?
Yes. Jumbo financing is available to qualified self-employed borrowers. Because larger loans can involve more detailed underwriting, working with a lender experienced in analyzing complex business and personal financials can be particularly important.
Can I refinance if I am self-employed?
Yes. Self-employed borrowers may be eligible for both rate-and-term and cash-out refinances, subject to borrower, property, and program requirements.
Explore Your Self-Employed Mortgage Options
Your tax return is only one part of your overall financial picture.
Whether you qualify through traditional income documentation, bank statements, or another available program, GuardHill can help evaluate your income, business structure, and financing goals to identify mortgage options that may work for you.
Contact GuardHill Financial today to discuss your self-employed mortgage options.
All loans are subject to credit and property approval. Program availability, rates, terms, documentation requirements, loan-to-value limits, and eligibility are subject to change and may vary based on borrower and property qualifications.
