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Self Employed Mortgages

Self Employed Mortgages

Q: If I use a Bank Statement Loan, do lenders use the gross deposits or a reduced percentage as my qualifying income?

Lenders typically do not use the full gross deposit amount as qualifying income. For Bank Statement Loans, they usually apply a discount factor to the total deposits to account for estimated business expenses. This factor can vary, but generally, only 50% to 80% of the total deposits are used as the calculated monthly qualifying income, depending on the industry and whether you submit personal or business bank statements.

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Traditional income documentation isn’t the only path to homeownership when you’re running a business. As a self-employed professional, you have access to specialized mortgage options that fit your situation, and it doesn’t always require tax returns.

Key challenges for self-employed mortgage applicants include:

Income stability verification due to variable earnings

Complex documentation requirements, generally requiring 2 years of tax returns, profit/loss statements

2 years history running the same business, sometimes without consideration of prior experience

Conservative income calculations by lenders and no credits for earnings that you can show for the recent year until you file actual tax returns

While traditional lenders may require additional verification steps, you can qualify for a mortgage with:

Personal and business tax returns

1099 forms you get from your employers or clients

Profit and loss statements

Bank statements showing business deposits

Assets and investment accounts documentation

Debt Service Coverage Loans (DSCR)

No Income verification loans

Whether you’re a freelancer, small business owner, or independent contractor, specialized loan programs can help make your homeownership dreams a reality without standard paystubs and W2s. We’ll help you navigate these options and find the perfect mortgage match.

Why Choose Loankea?

We make the loan process easier by using advanced technology and providing personalized service to achieve the best outcomes for each client.

Our Flexible Loan Solutions

Asset-Based Loans Utilize your stocks, bonds, or other investment assets as qualifying factors. This option allows borrowers to secure financing based on their asset portfolio value rather than traditional income verification, offering flexibility for high-net-worth individuals.
Bank Statement Loans Perfect for business owners with complex tax situations. Qualify using 12-24 months of recent bank statements, demonstrating cash flow through deposits. Available for both personal and business accounts, offering an alternative to traditional income documentation.
Conventional Loans Traditional mortgage options with right lenders may offer competitive terms and possible with only 1 year required tax returns, with competitive market rates and low downpayment. Ideal for self-employed borrowers looking for best possible terms.
DSCR Loans Debt Service Coverage Ratio loans focus on investment property potential. Qualification based on property’s projected rental income versus mortgage payment. Perfect for real estate investors and property entrepreneurs.
FHA Loans Government-insured mortgages with lower down payment requirements. Offers flexible credit guidelines with as low as 500 credit score and competitive rates. Requires a minimum of two years of self-employment history with stable or increasing income.
Home Equity Loans Access your property’s built-up equity through second mortgages or lines of credit. Use funds for business expansion, debt consolidation, or home improvements. Available with competitive terms and various repayment options.
USDA Loans Zero down payment options for properties in eligible rural areas. Income limits apply but offer competitive rates and reduced mortgage insurance requirements. Perfect for self-employed individuals in rural communities.
VA Loans Exclusive to veterans and active military members. Features include zero down payment options, competitive rates, and no monthly mortgage insurance. Flexible income verification options for self-employed veteran borrowers.

In addition, we provide:

Low wholesale interest rates

Competitive closing costs from 150+ nationwide mortgage banks

Fast approvals (7-15 business days clear-to-close)

Customized mortgage plans for each client

Simple online process from first contact to closing

Single point of contact throughout entire process

Self Employed Home Loan Common Requirements

Mortgage lenders focus on specific key factors when evaluating self-employed borrowers. They need to verify your income stability, examine your business location and type, and assess your company’s financial health. Lenders will analyze your business income to ensure it generates enough historical income to support loan payments and maintain long-term mortgage obligations.

Basic Criteria and Documents

A good credit score for favorable terms, generally starts with 680+ score, but can be acceptable with as low as 500

Debt-to-income ratio up to 55%, as per lender requirements

Bank statements or similar documentation verifying down payment funds

Documentation supporting active status of the business

Verification letter from your accountant

Legal documents for your company if you running business via entity

What We Offer at Loankea

As a self-employed individual, you’ll find a range of loan solutions designed for your specific financial situation. We provide conventional, government-, and non-traditional lending options.

Loan Features:

30-Year Fixed Rate: Consistent monthly installments across 30 years.

Multiple Purposes: Purchase homes, refinance existing loans, or access equity.

Requirements: 500+ credit score; minimum loan of $100,000

Acceptable Properties: single family residence, 2-4 unit properties, condominiums, condo hotels, townhouses, land lots, commercial properties

Our experienced lending specialists will guide you through each program’s benefits and requirements to identify the most advantageous financing solution for your situation.

Choose Loankea, and join thousands of happy borrowers who’ve discovered that getting a loan can actually be a pleasant experience. We’re here to prove that financial services can be both professional and personal – just the way they should be.

Customer Reviews

Philip L.

2 months ago

The purchase of our first home was more than successful thanks to Konstantin! His professionalism, care, and support at every stage made the process smooth and stress-free. Konstantin is a wonderful person to work with — very pleasant, attentive, and precise. Everything was handled quickly and accurately, without unnecessary “fluff,” which is so important when numbers are involved. He truly did everything in the best way possible. We are grateful for his work and happy to recommend him!

Yulia N.

1 month ago

Excellent specialists, they did everything quickly and took all our needs into account. Thank you so much for your professionalism, understanding, and help in buying a home. Without you, our dream of owning a house by the ocean would have remained just a dream. I recommend this team to everyone.

Stanislav T.

1 month ago

Konstantin made the impossible possible! After four failed attempts with others, he was the one who finally helped me complete my refinancing. It took six months — from April to October — and thanks to his persistence and professionalism, I was able to save over $90,000. I only wish I had found him earlier — it would have saved me so much time and stress. Truly grateful for his dedication and ability to get things done!

Got Questions?

What is Asset Depletion and how can I use it to qualify for a mortgage?

Asset Depletion is a non-traditional method for calculating qualifying income, primarily used by retirees or high-net-worth individuals. Lenders will take the value of your verifiable liquid assets (like stocks, bonds, or savings) and divide that total by a standard period, often 60 to 360 months (5 to 30 years). The resulting figure is then used as a monthly income amount to help you qualify for the loan without relying on traditional tax returns.

If I use a Bank Statement Loan, do lenders use the gross deposits or a reduced percentage as my qualifying income?

Lenders typically do not use the full gross deposit amount as qualifying income. For Bank Statement Loans, they usually apply a discount factor to the total deposits to account for estimated business expenses. This factor can vary, but generally, only $50\%$ to $80\%$ of the total deposits are used as the calculated monthly qualifying income, depending on the industry and whether you submit personal or business bank statements.

Is there an upper limit on the loan amount for non-traditional self-employed mortgages?

Yes, but the limits are generally quite high. While conventional loans adhere to conforming loan limits (set by Fannie Mae and Freddie Mac), non-traditional programs often operate under Jumbo Loan parameters. It is common for specialized self-employed loan programs to offer maximum loan amounts ranging from $3 million up to $10 million, depending on the specific program, down payment, and the borrower’s asset profile.

Can I use a self-employed mortgage solution to purchase a mixed-use commercial and residential property?

Yes, many specialized or portfolio lenders offer non-traditional financing options that cover mixed-use properties. These programs recognize that many self-employed individuals, such as artists or small business owners, may operate their business on the ground floor while residing in the upper unit. Qualification usually depends on the percentage of the building used for commercial purposes, with many programs accepting up to $25\%$ to $49\%$ commercial space.

What specific documents are required to verify the active status of my business?

Lenders need to verify that your business is legitimate and active. Required documents may include a business license, a Certificate of Good Standing from the state, documentation proving business ownership (such as Articles of Incorporation or Partnership Agreement), and a verification letter from your Certified Public Accountant (CPA) confirming the existence and structure of the business.