Answers · Self-employed
Can I get a mortgage without tax returns?
Yes. If you are self-employed, some lenders will qualify you on 12 or 24 months of bank statements, a profit and loss statement, or your 1099s instead of tax returns. Your income is still verified. It is verified a different way, one that reads what your business brings in before the write-offs.
Written by Andrew Malm, Senior Loan Originator, NMLS# 2663426. Last reviewed .
Tax returns are built to show the smallest income the law allows. A mortgage application wants the largest income you can prove. For a business owner those two goals fight each other, and the tax return usually wins. That is the whole reason these programs exist.
A bank statement loan reads your deposits over a year or two and applies an expense factor to estimate what you keep. A profit and loss loan uses a statement prepared by your CPA or tax preparer. A 1099 loan uses the 1099s themselves. Each one suits a different kind of earner.
These loans are fully underwritten. Expect the lender to check your credit, your down payment, your reserves, and that the business is real and has been operating. Expect questions about large or unusual deposits.
The trade is flexibility for cost. These loans usually cost more and ask for more down than a conventional loan. Sometimes the better move is one more year of tax returns that show more income. I will run both and tell you which one I would pick.
What I'd do
- Pull 12 to 24 months of statements for the accounts your income actually lands in.
- Keep business and personal money in separate accounts. It makes the math cleaner.
- Tell me about any big one-time deposits before the underwriter asks.
- Bring your last tax return anyway. Sometimes it is better than you think.
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