Self-employed mortgages

Who this is for

• Business owners, freelancers, contractors, and gig workers.
• Anyone whose tax returns understate their real cash flow because of write-offs.
• Borrowers with two years of self-employment history. One year is sometimes enough.

How it works, step by step

1. Conventional and FHA loans look at the net income on your tax returns. They average two years and add back depreciation.
2. If write-offs make that number too small, a bank statement loan can help. It counts 12 or 24 months of deposits instead.
3. Asset-based loans qualify you using liquid assets, money you can access quickly, instead of income.
4. These are called Non-QM loans, short for non-qualified mortgage. They cost more, so compare the true 5- and 10-year cost, not just the rate.

Read next

• 1099 and gig income: how a lender sees you when you apply

  Cross 25% of your income from 1099 or gig work, and Fannie Mae and Freddie Mac treat you as self-employed. Here is the exact line and what it means.

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• Bank statement loans explained: how self-employed borrowers qualify

  A bank statement loan reads your deposits instead of your tax returns. Here is who it is for, how the math works, and what it does not do.

• How lenders actually read your tax returns

  A lender does not use your Schedule C bottom line as is. Here is exactly what gets added back, what gets averaged, and how to see your own likely number.

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• Is the '49% of self-employed mortgages are denied' stat true?

  A widely shared number claims half of self-employed borrowers get denied. We checked where it comes from and what the real, verifiable data shows instead.

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• The self-employed mortgage document checklist

  Self-employed files stall in underwriting more often over a missing document than over low income. Here is the full list and why each item matters.

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• What a bank statement loan really costs, and what we cannot verify

  Lenders report bank statement loans run higher than a full-documentation loan. Here is the range, one real fee for comparison, and why no site can give you a single number.