Six Ways a Self-Employed Borrower Can Qualify
Your tax return is one option out of six. Choosing the right documentation method can change your approval by hundreds of thousands.
Self-employed borrowers are not hard to approve. They are hard to approve using the one method most lenders reach for first. Here are the six methods that exist, and when each one wins.
One: tax returns
Still the simplest route when your returns show strong net income. Two years are averaged and add-backs for depreciation and amortization help. If your returns work, use them.
Two and three: bank statements
Business statements apply an expense factor to deposits. Personal statements usually count deposits at full value. Which one wins depends on whether your draws or your revenue better represent your earnings, and we calculate both.
Four and five: 1099s and P&L
If your income arrives on 1099s, a 1099 only program is the shortest path. If your books are clean and multiple accounts make deposits hard to analyze, a CPA-prepared profit and loss statement collapses the whole thing into one page.
Six: assets
Asset depletion converts a portfolio into monthly income, and it stacks with any of the above. Owners who keep large reserves in the business or in a brokerage account often close the final gap this way.
The right answer is rarely obvious from the outside. Bring the raw numbers, let us model all six, and pick the one that gets you the house.
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