How to Qualify for a Mortgage If You're Self-Employed

Why Traditional Lending Penalizes Self-Employed Borrowers

If you're self-employed, 1099, or a small business owner, you already know how frustrating it can be to qualify for a mortgage.

Even if you’re earning great money, most lenders rely on your tax returns—which often show far less income than you're actually bringing in.

Why? Because business deductions, write-offs, and expenses reduce your taxable income. Unfortunately, traditional lenders use that reduced number to determine your loan eligibility.

A Smarter Solution: The Bank Statement Mortgage

Good news—there’s a better way.

With a Bank Statement Loan, we qualify you based on your actual business cash flow. That means we look at your bank deposits from the past 3 to 24 months—not your tax returns.

This means:

• No tax returns required
• No W-2s or pay stubs
• No need to amend or alter your filings
  

How We Calculate Your Income

Here's how lenders estimate qualifying income for bank statement loans:

1. We total your monthly business deposits
2. Subtract unallowed deposits (like transfers or personal funds)
3. Apply a standard expense factor (typically 30%)



Example:

• Business deposits: $11,000/month
• Minus $1,000 in unallowed deposits
• Net: $10,000/month
• After 30% expense factor → Qualifying income = $7,000/month

Use Our Free Income Calculator

Want to see what income you might qualify with? Try our Bank Statement Income Calculator — it does the math for you instantly.

No login. No sales pitch. Just clarity.

You’ll just need:

• Your average monthly business deposits
• Your business type (service, product, or real estate)
• Number of employees

Launch the Calculator

Next Steps Toward Pre-Approval

Once you see your estimated qualifying income, here’s what to do next:

• Book a quick consult with our team
• Start your pre-approval using bank statements
• Know your buying power before making an offer

We specialize in helping self-employed clients navigate this process and get approved with confidence—without the headaches of traditional underwriting.