Self Employed Income & Mortgage Loans

In addition to your credit score, your income is one of the most important factors that is considered when obtaining a mortgage. While many people have a regular salary, many others are self-employed, have just changed jobs or income levels, or earn their money through other sources than a salary.

We've tried to answer some common questions below. However, we know that everyone's situation is different. We can usually work out a mortgage program, even if you cannot conform to standard income requirements.

We'll be glad to answer any questions you may have about obtaining a mortgage. Just give us a call at 1-800-859-5648, or use our contact form to learn more.

1. Last year I made $75,000 .... $25,000 as a base salary and $50,000 in bonus and commission. This year so far, I have made $60,000 in commissions. How will an underwriter evaluate my income?


If your bonus (or commission) is 25% or more of your total compensation, then most of the mortgage industry defines you as self-employed. The underwriter will ask for the last two years' tax returns. Your income will be very close to the Adjusted Gross Income on line 31 of page 1 of the tax return. If you own 25% or more of a company, or if you are an employee of a relative - whether or not you get a W2 - then you are considered self-employed and your income is verified by line 31, page 1 of the IRS form 1040, or line 16 of 1040A, or line 4 of 1040EZ.

2. Will the answer to the question above change if I put down 20% and request that my income not be verified?

Yes. There are loans that do not require the verification of income. There are also loans that do not require that you have a job.

3. Can I put down only 10% and avoid having my income verified?

Yes, there are at least 2 ways of doing this. Both methods involve a mortgage with a slightly higher interest rate.