Updated: Sep 25
Being self-employed comes with plenty of freedom, but getting a mortgage can sometimes feel more complicated when your income doesn't fit the traditional employment model.
The good news? Being self-employed doesn't automatically mean you can't qualify for a mortgage. It simply means your income may need to be documented and assessed differently.
What Do Lenders Look At?
Depending on your situation, a lender may consider your tax returns, business financial statements, bank statements, credit history, length of time you've been self-employed, and the overall strength of your application.
One challenge for self-employed borrowers is that legitimate business deductions can reduce the income shown on a tax return. While that's great for your taxes, it can sometimes make your qualifying income look lower than what you actually earn.
There Are Different Options
Not every lender approaches self-employed income the same way. Depending on your circumstances, there may be traditional mortgage options as well as alternative lending solutions.
The key is finding a lender and mortgage product that fits your actual financial picture, rather than assuming you have to fit into a standard application.
Start Planning Early
If you're self-employed and thinking about buying a home, don't wait until you've found the perfect property to figure out your financing.
A conversation with a mortgage broker early in the process can help you understand how your income may be viewed, what documents you'll need, and what you can do to put yourself in the best position before you start shopping.
Whether you're purchasing, refinancing, or renewing, there may be more options available than you think.
