How to Get a Mortgage When You’re Self-Employed

In January of 2023, about one out of every ten Americans reported being self-employed. Working for yourself comes with plenty of benefits, like a flexible work schedule and an increased earning potential, but it has its downsides, too.

Most notably, being self-employed could hinder you when it comes to taking out a loan.

If you’re currently considering becoming a homeowner and you’re self-employed, then the process might be a bit more complicated for you. You may have to take extra steps with lenders or may even get denied a loan due to your status. Traditional mortgage providers may want to see income that’s steadier and more verifiable. When your income isn’t provable via a W-2 or paycheck, traditional lenders are much more hesitant to make a deal.

That said, you can still attempt to work with a traditional lender when you’re self-employed. If you have solid credentials otherwise and are willing to make a hefty down payment, then you may be able to secure a traditional deal.

To get in a good financial position, focus on improving your credit score. Pay your bills on time, get your debt to levels of credit ratios looking balanced and good, and correct any red flags that may be looming on your account. Don’t take on new debt, and do your best to reduce any existing debt that could be preventing you from getting more favorable rates on your loan. Another great strategy is to save up a bigger downpayment to help offset your self-employment income.

Finally, make sure to shop around with different loan providers before deciding on who to go with. Some lenders may have more stringent requirements than others. While researching different lenders, consider the long-term costs of each different loan type as well as your ability to meet the payments.

Another great option for you is to seek out a non-traditional lender to work with. Non-QM loans have more flexible underwriting standards. That means you can get a loan even if you’re self-employed, a freelancer, or you receive irregular payments from clients. Many non-QM lenders will determine if you qualify for a loan based on your average bank statement balance over the last 12 to 24 months. This is a huge advantage for small business owners whose tax returns show a minimal income or freelancers who receive hefty but irregular payments.

Self-Employed Non-QM Mortgages Through Non-QM Home Loans

Are you currently looking for a lender to work with to make your homeownership goals a reality? Here at Non-QM Home Loans, our team is passionate about helping our clients get approved for a nontraditional mortgage when they’re experiencing unique financial situations. We personalize every loan application we receive because we want to see you succeed.

Do you need more information? Check out our options now or give us a call at (800) 413-0240 to learn more about how Non-QM Home Loans can help you get qualified for the funding you need to secure your dream home.