How do self employed borrowers qualify for a mortgage?

Self employed borrowers can absolutely qualify for a mortgage. The right approach depends on how your income is documented, how long you have been in business, your credit profile, available assets, debts and the type of property you are purchasing. Traditional mortgage programs generally evaluate income using tax returns and business documentation, while alternative programs may allow bank statements, 1099 income, assets or other methods of documenting your ability to repay.

What is a bank statement mortgage?

A bank statement mortgage is a type of mortgage designed primarily for self employed borrowers whose tax returns may not fully reflect the cash flow their business generates. Instead of qualifying primarily from tax return income, an approved lender may analyze deposits shown on personal or business bank statements over a specified period. Guidelines vary by lender and program.

A DSCR loan, or Debt Service Coverage Ratio loan, is designed primarily for real estate investors. Instead of qualifying based primarily on the borrower's personal employment income, the lender evaluates the property's rental income compared with its housing expenses. Down payment, credit, reserves, property type and rental income requirements vary by lender.

Can I qualify if my tax returns show less income than my business actually produces?

Possibly. Legitimate business deductions can reduce the taxable income shown on a tax return. Traditional mortgage financing may still work depending on how your income is calculated, and there may be alternative options such as bank statement loans, asset based programs or other Non QM financing.

Can I get a mortgage if another lender already turned me down?

Yes, in some cases. A decline from one lender does not necessarily mean every lender will reach the same conclusion. Guidelines vary by lender and loan program and approval can never be guaranteed, but a second opinion can sometimes find a solution.

What is a Non QM mortgage?

A Non QM mortgage is a loan that does not follow all of the traditional Qualified Mortgage documentation requirements used by many conventional loan programs. Examples may include bank statement loans, DSCR loans, asset based qualification and certain alternative income documentation programs.

How much money do I need for a down payment?

The amount needed for a down payment depends on the loan program, property type, occupancy, credit profile and other factors, and guidelines vary by lender and loan program. Some eligible borrowers may qualify for programs requiring little or no down payment.

Can investment property income help me qualify?

Yes. Depending on the loan program and the property, rental income may be used when qualifying for an investment property mortgage, including DSCR programs that focus on the property's rental income and expenses. Guidelines vary by lender and program.

What documents should I have ready before applying?

The documents needed depend on your income and the type of mortgage you are considering, ranging from pay stubs and W2s for traditionally employed borrowers to tax returns, business documentation and bank statements for self employed borrowers.

Why would I use a mortgage broker instead of one bank?

As a mortgage broker, Diana Bunn can work with multiple lenders and compare programs, guidelines and pricing based on your individual situation, which can be especially valuable for self employed borrowers, investors and clients with complicated income or credit scenarios.

Do you help borrowers in both Florida and Georgia?

Yes. Diana Bunn helps homebuyers, homeowners and real estate investors with mortgage financing in both Florida and Georgia, including conventional, jumbo, government, DSCR, bank statement and other Non QM financing options.

Do you work with buyers in Fernandina Beach, Amelia Island, Yulee and Jacksonville?

Yes. Diana Bunn regularly works with homebuyers, homeowners, real estate agents and investors throughout Fernandina Beach, Amelia Island, Yulee, Nassau County, Jacksonville and the surrounding Northeast Florida communities.

Back to School, Back to House Hunting: Why August Is One of the Best Times to Buy

Diana Bunn

Aug 1

2 min read

As summer winds down, many buyers assume the real estate market slows down too.

Not exactly.

In fact, August can be one of the best opportunities to buy a home.

Here's why.

Less Competition, More Opportunity

Many families who needed to move before school have already purchased. That means fewer bidding wars and less pressure.

For buyers, that's a win.

You may have more negotiating power, more time to make decisions, and sellers who are more willing to work with you on price, closing costs, or temporary rate buydowns.

Sellers Are Motivated

If a home has been sitting on the market through the summer, sellers are often ready to make a deal.

That doesn't necessarily mean there's something wrong with the house.

It may simply mean they want to move before the holidays or they're carrying two mortgage payments.

Motivated sellers create opportunities for prepared buyers.

Interest Rates Are Only One Piece of the Puzzle

I know it's tempting to watch rates every day.

But the monthly payment depends on much more than the interest rate.

Purchase price, seller concessions, taxes, insurance, and financing strategy all matter.

Sometimes negotiating a lower purchase price or having the seller pay closing costs saves more money than waiting for rates to drop another quarter of a percent.

First Time Buyers, This Is Your Reminder

If you've been scrolling Zillow every night but haven't spoken with a lender yet...

Start there.

A real preapproval gives you confidence.

It tells you what payment fits comfortably into your budget and uncovers programs you may not even know exist, including:

Down payment assistance
FHA and VA financing
Low down payment conventional loans
Hometown Heroes for eligible Florida buyers
Specialized financing for self-employed borrowers

Realtors: Preparation Still Wins

The buyers getting homes today are the ones who are ready before they walk into the first showing.

Strong preapprovals
Clear communication
Creative financing when needed

Those things still win offers.

And when challenges arise, having a lender who knows how to solve problems can be the difference between a closing and a canceled contract.

Final Thought

Every month someone tells me,

“I’m going to wait and see what happens.”

Sometimes waiting makes sense.

But many times, the better question is:

“What can I do today that puts me in the strongest position tomorrow?”

That's a conversation worth having.

Because your home is personal.

Your mortgage should be too.