Can I get a mortgage if I'm self-employed?

What are my options?

• Conventional loan: the best pricing. Usually needs about two years of self-employment and tax returns that show enough income.
• FHA or VA loan: also use your tax returns, with more flexible credit rules.
• Non-QM bank statement loan: qualifies you on 12 or 24 months of bank deposits instead of tax returns.
• Non-QM 1099 loan: for contractors paid on 1099s.
• DSCR loan: for rental properties, qualifying on the property's rent. See what a DSCR loan is.

Why do self-employed people get turned down?

Usually because of write-offs. Lenders on regular loans use your taxable income after expenses, averaged over two years. Great tax planning can make a thriving business look like it earns very little. The other common trip-ups are a drop in income from one year to the next, or less than two years in business.

What should I do before I apply?

• Talk to a lender before you file your taxes, if you can. How you file affects what you can qualify for.
• Keep business and personal money in separate accounts.
• Have your last two years of returns and a year-to-date profit and loss ready.
• Let me look at your returns early. I can often find income that counts, like depreciation, that you didn't know about.

More detail: what documents self-employed borrowers need.

Example scenario (illustrative)

A real estate agent in Austin has been self-employed for five years. Her tax returns show strong income after write-offs, so she qualifies for a conventional loan with the best pricing. Her friend, a contractor with heavy write-offs, qualifies instead with a 24-month bank statement loan.

Our take

Being self-employed doesn't disqualify you; it just means your lender needs to understand your business. We're the direct lender on conventional and Non-QM, so I'll show you both paths and what each one costs.