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Loans for Self-Employed Borrowers

Which American Dream should you pursue? You have a passion to pursue your own business as an entrepreneur or a freelancer. At the same time, you’re ready to move from renting to owning your own home. How do you make the choice? The good news is you don’t have to choose. Home loans are available to self-employed borrowers. Let’s look at what self-employed borrowers need to consider ahead of pursuing their dreams of home ownership.

Who Is Considered to Be a Self-Employed Borrower?

A self-employed borrower is anyone who owns their own business or works on a freelance or contractor basis. The term is broad and covers more workers than ever as the gig economy continues to bring in more and more workers. Essentially, if you earn money for your work, but not as a “paid wage” from an employer, you are a self-employed borrower.

But I Thought Banks Don’t Give Mortgages to Self-Employed Borrowers!

The general wisdom is that someone who is self-employed has to have at least 5 years of working as a freelancer before a bank will even consider them for a home loan. Most lenders want to see 2 years of self-employment income, usually represented through a personal or business tax return. In some situations, even this two-year requirement can be waived if,

  • You can demonstrate regular monthly deposits on your bank statement

  • Your newer self-employed experience is tied to previous work or business ownership

As interest rates rise, lenders are looking for more potential customers. We’re in a good market for self-employed borrowers to get a good home loan.

What Can I Do as a Self-Employed Borrower to Get a Mortgage Loan?

When you're self-employed, an organization is important. This holds true when you're looking for a mortgage loan as well. When lenders consider loans for anyone (wage earner or self-employed) they're looking primarily at income stability and your likelihood to honor your repayment agreements (credit history).

As you prepare to move from being a renter to becoming a homeowner, make sure you're able to show potential lenders the following,

  • A list of clients including relationship duration and frequency of work

  • Any licensing credentials you possess for your freelance work

  • Your DBA, if applicable

  • Personal and/or business tax returns that show your income

  • Any insurance related to your business

  • Monthly bank statements showing frequency and amount of deposits

  • Profit and loss statements including

    • Schedule C

    • Form 1120S or K1

  • Personal and professional references

Are you or your client self-employed?

Let me help you or your clients reach their dream of home ownership. Go to to schedule an appointment and talk about your or your client's options.


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