Self-Employed Mortgage Loans

Many self-employed individuals often wonder if they can qualify for a mortgage.  The quick answer is yes!

Requirements will vary among lenders but you should expect to provide detailed information about your business, income, assets, tax returns, etc.

Most lenders will require that you have been in business for a minimum of two years for a self-employment mortgage.

How do I qualify for a self-employed mortgage?

To qualify for a self-employed mortgage, you typically need to meet the following requirements:

  1. Proof of Income: You will need to provide proof of your income as a self-employed individual. This can include tax returns, profit and loss statements, and bank statements.  Have good documentation available.

  2. Good Credit Score: Lenders will look at your credit score to assess your creditworthiness. A higher credit score can help you qualify for better mortgage terms.  Minimum scores can vary by lender so it’s hard to give an exact score here.

  3. Stable Income: Lenders will want to see that you have a stable income as a self-employed individual. Consistent income over a period of time can strengthen your application.  Be prepared to provide detailed information around your income.

  4. Down Payment: You will need to have a down payment saved up for the mortgage. The amount required can vary depending on the lender and the type of mortgage.  20% is best if that meets your budget, putting less down can make it harder to qualify.

  5. Debt-to-Income Ratio: Lenders will evaluate your debt-to-income ratio to ensure you can afford the mortgage payments along with your other debts.  As an estimate, your anticipated housing costs should be no more than 28% per month of your gross income.

  6. Business Documentation: You may be required to provide documentation related to your business, such as business licenses, contracts, or client invoices.  Some business ventures (i.e. marijuana) may exclude  you from qualification.

  7. Tax Returns: Lenders may ask for several years of tax returns to verify your income and financial stability.  You should expect to provide the last 2-5 years of tax returns depending on your lender.

It’s important to note that the specific requirements can vary between lenders, so it’s recommended to consult with your First Choice loan officer for personalized guidance on getting a self-employed mortgage.

If you need to know more about about self-employed mortgages don't hesitate to call First Choice Financial at (970) 683-1910.

Get in Touch

First Choice Financial

Grand Junction, CO

(970) 683-1910