Mortgage options for self-employed buyers

Traditional tax-return qualification

Conventional and government-backed loans commonly analyze personal and business tax returns, often using a two-year history while allowing certain documented non-cash expenses to be added back. The exact calculation depends on the business structure, ownership percentage and income trend.

Alternative documentation paths

When available, non-agency programs may evaluate income using personal or business bank statements, 1099 earnings, a profit-and-loss statement or eligible assets. These programs have their own credit, reserve, down-payment and property requirements and may cost more than traditional financing.

• Bank-statement programs commonly review 12 or 24 months of deposits and apply an expense factor.
• 1099 programs may use gross receipts or adjusted earnings under program-specific rules.
• Asset-depletion programs convert eligible liquid assets into a qualifying monthly amount.

Prepare the business story

Be ready to explain what the business does, how long it has operated, who owns it and whether revenue is stable. Keep business and personal funds clearly separated when possible, and avoid unexplained transfers in the months leading up to an application.

What to gather for an initial review

Jake can tell you which items apply before you upload anything. A first pass may involve recent personal and business statements, filed returns, a year-to-date profit-and-loss statement, business registration details and documentation of ongoing obligations.