Self-Employed Borrower Considerations
Self-employed applicants are generally underwritten on documented net income over a period of time. Documentation requirements vary by lender and program.
General potential benefits
- Multiple documentation approaches exist across lenders
- Stable, documented income can qualify like any other income
General considerations
- Deductions that reduce taxable income can also reduce qualifying income
- Documentation requests are often more detailed
Common eligibility factors
- Length of self-employment
- Documented net income
- Business stability
- Credit profile
Possible costs
- Standard closing costs
Questions to ask a mortgage professional
- Which loan programs am I likely to be eligible for, and why?
- What documentation will you need from me, and when?
- How do the estimated closing costs compare between programs?
- How would a change in my down payment affect my monthly payment?
- What would change if my credit profile improves before closing?
Readiness checklist
- Gather two years of business and personal tax returns
- Prepare a year-to-date profit and loss statement
- Ask how add-backs are treated
Frequently asked questions
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This guide is educational. Eligibility factors described here are common considerations, not universal or guaranteed requirements. Nothing here is a loan offer, an approval, or a rate commitment. A licensed mortgage professional must verify actual terms.