Self-employed professionals can qualify for a mortgage, but the process differs from traditional borrowers. Proper documentation, such as tax returns and profit/loss statements, is key.
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StatePoint - If you’re self-employed or own a business, you may be wondering if it’s possible to get a mortgage. The short answer is yes, you can, but the process will look different. You’ll need to provide documentation verifying your employment and lenders will be analyzing your financial situation and the financial situation of your business to see how likely you are to pay back your loans in a timely manner. To help you put your best foot forward, Wells Fargo is offering guidance on navigating the home loan process. What does it mean to be self-employed? Typically, lenders consider an applicant self-employed if they meet any of the following:
- They own at least 25% of a business
- The ownership of a business is their major source of income
- They complete a 1099 tax form during tax filing instead of a W-2
- They’re an entrepreneur or sole proprietor whose income is filed under Schedule C of their tax returns
- They’re an independent contractor or service provider
- Business licenses and/or DBA certificates
- Proof of correspondence with CPAs and/or clients
- Proof of business insurance
- Profit/loss statements or balance sheets reflecting your business’s performance
- Lenders’ requirements vary. Check with yours for what will be required for your situation.
- Schedule B (Form 1040) – Interest and ordinary dividends
- Schedule C (Form 1040) – Profit or Loss from Business (Sole proprietorship)
- Schedule D (Form 1040) – Capital Gains and Losses
- Schedule E (Form 1040) – Supplemental Income and Loss
- Schedule F (Form 1040) – Profit or Loss from Farming
- IRS Form 1065 – U.S. Return of Partnership Income
- IRS Form 1120S – U.S. Income Tax Return for an S Corporation
- IRS Form 1120 – U.S. Corporation Income Tax Return
If you are self-employed, there are methods available to help make your goal of homeownership a reality
Staying organized. Keep expenses separate if you have multiple income sources, and separate business and personal accounts so that lenders can more easily tell which assets are which. Having additional support, especially for closing. Certain factors may lower your risk for lenders, like utilizing a co-signer or borrower or paying a higher-percentage down payment than what’s required. What’s next? If you are self-employed, there are methods available to help make your goal of homeownership a reality. For example, eligible self-employed borrowers with Wells Fargo may have access to a variety of loans, such as VA or FHA loans or Wells Fargo products like Dream. Plan. Home. and the Homebuyer Access grant. Information can be found online about the eligibility requirements and personal tax implications of these products. Talk to a home mortgage consultant to learn more about what your mortgage process may look like. Also, check out Wells Fargo’s home lending portal for personalized rate quote tools and for its content library featuring helpful articles. These can be found at https://www.wellsfargo.com. “While self-employment makes obtaining a mortgage a bit more complex, your lender will walk you through the process, step by step,” says Rulon Washington, mortgage sustainability, Wells Fargo.
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In a month marked by remembrance and gratitude, we revisit stories that defined our region — honoring veterans, celebrating Thanksgiving, and spotlighting moments of unity, resilience, and spirited debate.
From local news, sports, and community events to politics, and Opinion-Editorial viewpoints, discover archived posts published on November 3 in previous years, offering a rich tapestry of life in Champaign County and the broader community, curated by The Sentinel. Here are the headlines from local news, sports, community events, and editorial viewpoints in and around Champaign-Urbana.
