If you own a business, work on commission, drive for a platform or get paid on a 1099, buying a home can feel harder than it should. Lenders look at your income differently from a salaried worker, and a smart tax return can make your qualifying income look smaller than what you really earn. Knowing how lenders see you is half the battle.

How lenders usually look at self-employed income

• Most conventional and government-backed loans use your tax returns, often two years of them, plus a profit and loss statement in some cases
• Business deductions that lower your tax bill also lower the income a lender can count
• Income that rises and falls may be averaged, and a decline can hurt
• Lenders look closely at business and personal bank statements

Other loan paths

Some lenders offer alternative documentation loans, such as bank statement loans, that look at deposits instead of tax returns. These are often called non-QM loans. They can help in the right situation, but they usually cost more, so compare them with a traditional loan first. Talk to Nil about approved lenders who work with self-employed buyers.

What to do before you apply

• Keep business and personal accounts separate
• File your tax returns on time and keep copies of everything
• Pay down debt and avoid new credit before and during the process
• Save for a larger reserve, which gives lenders more confidence
• Talk to your accountant before a big purchase, since some strategies affect your qualifying income

How we help

We connect you with lenders who understand self-employed borrowers and help you search in a price range that fits. We are not lenders and cannot promise an approval. We work with buyers across Atlanta, Brookhaven, Decatur, Duluth, Ellenwood, Griffin, Hampton, Lawrenceville, Lilburn, Locust Grove, McDonough, Norcross, Snellville, Stockbridge, Stone Mountain and Tucker.

Nil Patel is a licensed Georgia real estate salesperson with Keller Williams Realty Atlanta Partners. This page is general information, not legal, tax or financial advice, and nothing here is a commitment to lend. Talk to a lender and a real estate attorney about your own situation.