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Finding a mortgage lender as a freelancer/self-employed

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Nadezhda_K
Joined:
19.10.2020
Posts: 2434
Topic Starter
22.01.2025 22:13
I've been self-employed for about three years now and I'm finally looking to buy my first home. I've heard horror stories about how difficult the underwriting process is when you don't have a traditional W-2 salary. Does anyone have recommendations for lenders who actually understand how to calculate income for contractors? I'm worried about getting rejected just because my tax returns look a bit different from a standard employee's. Any advice on what documentation I should have ready would also be appreciated.
18 replies in this topic
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Kaya_J
Joined:
13.12.2020
Posts: 1869
28.01.2025 00:05
It’s definitely harder, but not impossible. You really need to find a mortgage broker who specializes in self-employed borrowers rather than going to a big bank.
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vulk_samotnik
Joined:
14.10.2022
Posts: 2124
06.02.2025 05:59
In reply to a previous post
I second the broker recommendation. A local credit union was way more flexible with my 1099 income than the big national lenders were.
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Maya_L
Joined:
18.06.2024
Posts: 318
15.03.2025 00:26
Make sure you have at least two years of tax returns ready. They will average your net income after deductions, so don't be surprised if your 'qualifying' income is lower than what you actually bring home.
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redoven
Joined:
30.04.2022
Posts: 1054
29.03.2025 08:22
In reply to a previous post
Exactly, that's the trap! My accountant always helped me write off as much as possible to save on taxes, but that really hurt my borrowing power when I went to apply.
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ekspert_forum
Joined:
29.01.2020
Posts: 484
07.05.2025 02:59
Does anyone know if they look at business bank statements if the tax returns don't show enough income? I've heard of 'bank statement loans' but the rates seem high.
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vesko_55
Joined:
29.06.2021
Posts: 856
13.05.2025 08:46
In reply to a previous post
Bank statement loans are a life-saver if you have high write-offs, but yes, you pay a premium in interest for the lack of traditional documentation. Only use them if you absolutely have to.
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Leon_M
Joined:
11.05.2022
Posts: 1644
14.06.2025 08:10
In reply to a previous post
I went through this last year. I had to provide a P&L statement signed by my CPA, which helped prove my income was trending upward.
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Maks_D
Joined:
28.02.2025
Posts: 883
18.06.2025 01:48
Good luck! It was a headache for me, but finally getting the keys made it all worth it.
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Fabi_W
Joined:
07.04.2020
Posts: 794
26.08.2025 10:52
My advice: stop trying to be clever with your tax deductions for the two years leading up to your home purchase. It sucks to pay more in taxes, but it makes the mortgage process so much smoother.
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redoven
Joined:
23.04.2020
Posts: 850
31.08.2025 19:49
In reply to a previous post
That's exactly what my lender told me. You have to choose: lower tax bill or higher mortgage approval. You usually can't have both.
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misho_777
Joined:
06.11.2020
Posts: 232
12.10.2025 00:34
Try to find a lender who handles 'portfolio loans.' They keep the loan in-house and aren't as strictly bound by Fannie Mae/Freddie Mac guidelines.
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Aleks_K
Joined:
01.08.2024
Posts: 830
04.12.2025 18:59
Check out some of the online mortgage lenders that focus specifically on gig workers. They have better tech for processing non-standard income.
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Leon_M
Joined:
13.08.2022
Posts: 2026
05.12.2025 19:04
In reply to a previous post
Is it true that they need to see a business license or proof of incorporation? I'm a sole proprietor and I'm worried about that.
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Stefan_W
Joined:
26.08.2021
Posts: 1635
06.12.2025 14:52
In reply to a previous post
Usually, they just want to see your Schedule C and your 1099s. If you’ve been doing it for three years, that should be plenty of proof.
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otgovor_BG
Joined:
28.03.2025
Posts: 767
14.01.2026 08:26
I had to write a letter of explanation for why my income fluctuated so much between year one and year two. Just be honest and provide the data.
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Yana_P
Joined:
14.10.2022
Posts: 1379
22.01.2026 04:13
In reply to a previous post
Don't let one 'no' discourage you. I got rejected by two lenders before I found one who actually looked at my business growth instead of just the bottom line.
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Yavor_K
Joined:
11.11.2020
Posts: 244
16.02.2026 08:21
Keep your personal and business finances strictly separated. It makes the underwriter's life so much easier and they'll trust your paperwork more.
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radek_sofia
Joined:
26.09.2025
Posts: 1021
22.03.2026 23:40
In reply to a previous post
This is great advice. Having clean records is 90% of the battle when you're self-employed.

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