Conventional loans
Income is generally calculated from your filed returns, including W-2 wages from your own company, K-1 income and guaranteed payments, averaged across two years with allowable add backs such as depreciation.
Back to self employed loan optionsSELF EMPLOYED.
Ed Parcaut · Mortgage strategist · NMLS #235384
SELF EMPLOYED.
NOT HARD TO LEND TO.
If you own the business, your income story takes more explaining. That is a paperwork problem, not a disqualification. Let us look at your numbers before anyone tells you no.
Why it feels harder
THE WRITE OFFS THAT
HELP IN APRIL.
Every deduction that lowers your tax bill also lowers the income a conventional lender can count. Business owners are often surprised to learn a profitable company can read as a small salary on a loan file. Knowing that up front changes which options are worth pursuing.
FHA loans
Government insured financing with more flexible guidelines on credit and down payment. Business income is still documented from your returns, but the overall file is weighed differently.
VA loans for self employed veterans
Self employment does not disqualify you from a VA backed loan. Documentation requirements are usually more detailed.
Bank statement loans
Certain lenders review 12 or 24 months of business or personal deposits instead of tax return income. Useful when write offs hide what the business really earns. Terms and requirements differ from conventional loans.
DSCR loans for investors
For a rental property, some lenders qualify the loan on the property's expected rent compared with its monthly housing cost, rather than on your personal income.
Program availability, rates, and requirements vary by lender and by your individual file. Nothing here is a commitment to lend.
What to gather
BRING THESE
TO THE TABLE.
You do not need everything before we talk. This is what a complete self employed file usually asks for, so nothing catches you off guard later.
- Two years of business and personal tax returns. Most loan programs review the full return, including schedules, to understand how your income is reported.
- Profit and loss statements. A current year to date statement helps show where the business stands since your last filed return.
- Business bank statements. Some programs review deposits over 12 or 24 months instead of tax return income.
- Proof the business is active. A business license, entity filing, or a letter from your accountant is commonly requested.
How long do I need to be self employed to qualify?+
Two years of self employment history is the common expectation. Shorter histories are sometimes considered when there is related prior experience in the same field, subject to the lender's requirements.
My tax returns show low income after write offs. Does that stop me?+
Write offs reduce the income a lender can count on a conventional loan, which is the most common surprise for business owners. Some lenders review bank deposits instead. We look at both before you choose a direction.
Do I need a bigger down payment?+
Not automatically. Down payment requirements follow the loan program and your overall file, not your employment type.
Will my business debt count against me?+
It depends on how the debt is documented and who is obligated on it. Bring the details and we will sort out what is likely to be counted.
Can we talk before I apply?+
Yes. The free 30 minute consultation exists for exactly this. No application, no credit pull, just a look at your situation.
Related reading
KEEP LOOKING.
Business owner articles
Plain language articles on documenting income, planning a purchase, and preparing a file.
Read the articlesBank statement loans
Qualify on 12 or 24 months of deposits instead of tax returns.
See how it worksDSCR loans for investors
Qualify a rental property on its rent, not your personal income.
See how DSCR worksBuying another home
Already have a mortgage and looking at a second purchase? Here is how the two payments are weighed.
Read the guideAll mortgage options
VA loans, reverse mortgages, and purchase planning in one place.
See mortgage solutionsFree guides
Preparation guides you can read before your first conversation.
Browse the guidesFree guide
Self-Employed Borrower Blueprint
Compare bank statement and DSCR loans and know which documents to prepare before you talk with a lender.
Reviews on Google
WHAT CLIENTS SAY
ABOUT WORKING WITH ED.
5.084 Google reviewsRead them on Google
Working with Ed Parcaut on our vacation home purchase was an outstanding experience from start to finish. Ed's expertise and deep knowledge of the lending process made everything feel seamless. He took the time to explain every step clearly, answered all of our questions with patience, and helped us navigate the unique aspects of financing a second home with confidence. What truly stood out was Ed's responsiveness and efficiency. No matter the time or situation, we always received quick updates and fast answers, which made the entire process move smoothly and on schedule. His professionalism, attention to detail, and commitment to excellent service exceeded our expectations. I highly recommend Ed to anyone looking for a knowledgeable, reliable, and highly responsive lender — for any home purchase.
Ed made the process so easy and simple for my wife and I. When we had questions, he had answers. He communicated with us constantly and clearly. I absolutely recommend his services. Owning our forever home post-military retirement and finally settling down and raising our family has been our goal for a long time and Ed helped make that a reality for us. Thanks again Ed!
I am thoroughly blessed, thankful and satisfied with the process. And all the time that it took the different steps it took to get this process done. Thank you, well done.
Ed is a true professional and I would recommend him to friends and family without hesitation. He kept us informed every step of the way all the way to closing! He's also just a really nice human being. No need to look anywhere else for your home loan needs cause Ed knows his stuff.
From beginning, middle, and end of this home lending experience my work with Ed, and Amy has been wonderful. They have been very supportive, and generous with their kindness, and they have excellent professionalism with regard to working well with all parties involved. Their knowledge, experience, and time has been much appreciated. Thank you so much, and I look forward to the next time we meet!
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