Self-Employed Home Loans

Not all borrowers can qualify for traditional home loans, which rely heavily on W-2 forms and a steady paycheck from employers to verify income. SurePath Lending can assist self-employed borrowers that are trying to secure a mortgage specifically designed for individuals who run their own business, work as freelancers, or have an income primarily from contract work.

Qualifying for a Home Loan When You Are Self-Employed

Self-employed home loans require applicants to provide alternative forms of documentation to prove their income stability and ability to repay the loan. Mortgage lenders require the following:

• Tax returns (personal and business) for the last two to three years
• Profit and loss statements for your business
• Bank statements for the last two years
• Proof of business insurance (if applicable)
• Proof of solid credit history
• Higher down payment

Depending on the tax forms that you file, lenders may also require:

• Schedule C (Sole Proprietorship)
• K-1 Form 1065 (Partnership)
• K-1 Form 1120S (S-Corp)
• Form 1120 (C-Corp)

Self-employed applicants might face stricter requirements, such as a higher credit score, lower debt-to-income ratio, and larger down payments. Lenders scrutinize these documents to assess the borrower’s average monthly income and any fluctuation in earnings that can be common for self-employed individuals.

Despite these hurdles, self-employed home loans offer flexibility and an opportunity for entrepreneurs and independent contractors to invest in property. It is essential for self-employed borrowers seeking a mortgage to thoroughly prepare and organize their financial documents and proof of income.

Consulting with a licensed loan officer can help you navigate the process to increase your success for home loan approval.