Self-Employed Mortgage Qualifier

Find out how much house you can actually afford based on standard freelance underwriting guidelines.

Freelancer Mortgage Warning

Most traditional banks use your NET income after deductions. Heavy tax write-offs may severely reduce your qualifying amount. Consider a non-QM Bank Statement loan for higher buying power.

Tax Return History

Year 1 Net Profit

Year 2 Net Profit

Alternative Income (Last 12 Mo)

Total Gross Bank Deposits

Total Gross 1099 Income

Debts & Loan Details

Total Monthly Debts (Auto, Cards, etc.)

Interest Rate

Down Payment

Highest Estimate

$378,953

1099 Direct Method

Highest estimate, not a recommendation. Bank statement and 1099 programs are non-QM and price above conventional, so the same payment buys less house. Re-run with the rate you were actually quoted before comparing.

Qualification by Method

Tax Return Standard

Qualifying Income: $4,167/mo

Two-year average of net profit after deductions.

$186,569

Bank Statement Non-QM

Qualifying Income: $5,833/mo

Assumes a 50% expense factor against gross deposits.

$262,510

1099 Direct Non-QM

Qualifying Income: $9,000/mo

Assumes a 10% expense factor. Lenders apply anywhere from 10% to 50%, so a quote can land well below this.

$378,953

Your own returns imply an expense ratio near 54%, well above the 10% modelled here. A lender that uses your actual ratio would credit far less income than the 1099 figure shows.

Your down payment is under 20% at this price, so mortgage insurance would apply and eat into the payment shown.

Assumes a 28% housing and 36% total debt-to-income limit, a 30-year term, and that 20% of the payment goes to property tax and insurance. Some lenders stretch debt-to-income to 43% or beyond on a strong file. Expense factors of 50% on bank statements and 10% on 1099 income are industry defaults that vary by lender. This is an estimate only — actual qualification depends on credit score, reserves, property taxes, insurance, and your complete financial picture. Consult a licensed mortgage broker.

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Frequently Asked Questions

Why is it harder to get a mortgage as a freelancer?

Traditional banks base your loan amount on your Net Income (the amount on the bottom of your Schedule C tax return). Because freelancers take legitimate business deductions to lower their tax bill, their "qualifying income" for a mortgage often looks much lower than what they actually bring in.

What is a Bank Statement Loan?

A bank statement loan (also known as a Non-QM loan) does not look at your tax returns. Instead, the lender looks at 12 to 24 months of your business bank statements, totals all the deposits, and applies a standard expense factor (often 50%). This usually results in much higher buying power for freelancers.

What are DTI Ratios?

DTI stands for Debt-to-Income. The "Front-End" ratio (usually capped at 28%) is the percentage of your monthly income that goes toward your housing payment. The "Back-End" ratio (usually capped at 43%) includes your housing payment plus all other monthly debts like auto loans and credit cards.

How many years of history do I need?

Most traditional lenders want to see at least 2 full years of self-employment tax returns. However, if you have been in the same line of work previously as a W-2 employee, some lenders may allow just 1 year of self-employed history.