Self-Employed? You Can Still Get a Mortgage.
Business deductions can reduce the taxable income shown on a self-employed borrower’s tax returns. When traditional income calculations do not reflect the borrower’s qualifying cash flow, eligible alternative-documentation programs may consider bank deposits, a profit-and-loss statement, 1099 income or qualifying assets.
Can a self-employed borrower get a mortgage?
Yes. If you own a business, work as a contractor, earn commission, or work for yourself in any other way, you can still buy or refinance a home. The difference is how your income is documented. I'm Tyler Hardy (NMLS #2770579), and self-employed borrowers are a big part of my work.
Why do tax returns hurt self-employed borrowers?
Business owners write off real expenses, which lowers taxable income. That is smart tax planning, but a lender that qualifies you only on your returns sees the smaller number. Non-QM programs look at other proof of what you earn.
What are the three ways to qualify without relying on tax returns?
Eligible self-employed borrowers may be able to document income using bank statements, 1099 income, a profit-and-loss statement or other alternative documentation. Required documentation and business-history requirements vary by program. Qualify with 12 or 24 months of bank statements.
| Option | How you qualify | Often a fit for |
|---|---|---|
| Bank statement | Qualify with 12 or 24 months of bank statements | Owners with steady deposits |
| P&L | Qualify on a profit and loss statement, typically prepared by a CPA or tax preparer | Owners without two years of returns |
| Asset depletion | Qualifying assets may be used to establish income | Borrowers with significant liquid assets |
Which option fits me?
- Choose bank statement if your deposits tell your income story better than your tax returns do.
- Choose P&L if you have a CPA or tax preparer who can prepare a profit and loss statement for you.
- Choose asset depletion if you hold substantial liquid assets and want those to count as income.
- Not sure? Call me and I will walk you through which option may fit. I will also tell you honestly if none fits yet.
For a side-by-side look, read the comparison of bank statement, P&L and asset depletion loans.
Who does this speak to?
Business owners, contractors, Realtors, commission earners, gig workers, and professionals in private practice.
What do I do next?
Call me or request a call back. I will explain your options, and I personally reply within one business day. If you were told no by a bank or credit union, start with my second opinion page.
Bank statement loans
Learn more →P&L-only loans
Learn more →Asset depletion
Learn more →1099-only loans
Learn more →Non-QM hub
Learn more →Compare the three options
Frequently asked questions
Can I get a mortgage if my tax returns show low income?
You may. Business deductions can reduce the taxable income shown on a self-employed borrower’s tax returns. When traditional income calculations do not reflect the borrower’s qualifying cash flow, eligible alternative-documentation programs may consider bank deposits, a profit-and-loss statement, 1099 income or qualifying assets.
How many months of bank statements do I need?
Qualify with 12 or 24 months of bank statements. Eligible self-employed borrowers may be able to document income using bank statements, 1099 income, a profit-and-loss statement or other alternative documentation. Required documentation and business-history requirements vary by program.
Do I need a CPA?
For the P&L option, the profit and loss statement is typically prepared by a CPA or tax preparer. Eligible self-employed borrowers may be able to document income using bank statements, 1099 income, a profit-and-loss statement or other alternative documentation. Required documentation and business-history requirements vary by program.