Self-employed and complex income

Mortgages for self-employed borrowers

If you are self-employed and your tax returns do not show what you actually earn, traditional underwriting is not your only option. Bank statement, 1099, P&L, asset-based, and other Non-QM programs.

If your returns do show what you actually earn, start with Florida home loans instead.

Documenting income

Four ways to show what you make

Bank statements

Income is derived from deposits over a set period rather than from your returns. Personal or business accounts, depending on the program.

1099

For contractors and commissioned earners who receive 1099s but write enough off that the net figure does not reflect the work.

Profit and loss

A prepared P&L for the business, used in place of returns. Requirements around who prepares it differ by lender.

Assets

Qualifying from what you hold rather than what you earn. Checking, savings, brokerage, retirement, trust accounts, the cash value of life insurance, and crypto can all count, at percentages that vary by program.

Who it fits

Find your situation

You write a lot off

Good tax planning and a strong mortgage application pull in opposite directions. These programs look at a different number.

Your income is uneven

A strong year next to a quiet one averages badly under traditional underwriting. There are other ways to present it.

You are asset rich

Retired, between ventures, or simply holding more than you draw. Assets can do the qualifying.

You were told no already

Some of my clients come to me after being told no somewhere else. A decline at one lender is not a decline everywhere.

Buying it as a rental instead? See DSCR loans, which qualify the property rather than you.

Worth raising early

The thing that slips closings

If you are qualifying on assets and the money sits in a business account, it usually has to move into your personal account first. That often means a distribution, a conversation with your CPA, and sometimes a letter from them. It is very manageable when it comes up in week one. It is a problem when it comes up in underwriting, which is where it surfaces if nobody asked. I ask.

Worth knowing

These programs are not all the same

Guidelines differ meaningfully between lenders on how deposits are counted, how long you need to have been self-employed, and how assets are treated. Send me the shape of your income and I will tell you which program fits and where it prices best. In the meantime the calculators will give you a realistic monthly figure to work from.