Self-employed buyers bring entrepreneurial spirit, flexibility, and determination to the homebuying process — but they also face unique challenges when it comes to getting approved for a mortgage. As a Realtor, understanding the ins and outs of self-employed financing can help you better support these clients, set realistic expectations, and partner with a lender who knows how to navigate these waters. At Tidewater Mortgage Services, we work closely with agents like you to make homeownership a reality for even the most complex borrower profiles.
- Income Documentation: It’s Not Just About Pay Stubs
Unlike traditional W-2 employees, self-employed buyers typically need to show two years of personal and business tax returns to verify income. Underwriters look for consistency in income and may average earnings over that time. They’ll also review profit-and-loss statements, balance sheets, and sometimes year-to-date income if the current year shows a positive trend.
Tip for Realtors: Encourage buyers to start gathering these documents early. The cleaner and more organized their financial records, the smoother the process.
- Debt-to-Income (DTI) Ratios Can Be Tricky
Many self-employed individuals deduct as many expenses as possible on their taxes, which lowers their net income — and that can impact their DTI ratio. Even if they actually make enough money to afford the home, their tax returns might say otherwise.
Tip for Realtors: Help manage expectations and partner with a loan officer early in the process who can run scenarios and potentially recommend solutions like bank statement loans, asset-based programs, or other alternative income documentation strategies.
- Choosing the Right Lender Makes All the Difference
Not every lender is well-versed in handling self-employed borrowers. At Tidewater Mortgage Services, we specialize in finding creative, compliant financing solutions that take into account the full picture — not just the numbers on a tax return.
Tip for Realtors: Recommend a lender (like us!) who understands self-employment nuances and communicates clearly throughout the process.
Working with self-employed clients doesn’t have to be overwhelming — not when you have the right mortgage partner by your side. Tidewater Mortgage Services is here to help you and your buyers navigate the loan process with confidence, clarity, and care.
Let’s connect and talk about how we can support your next self-employed buyer. Reach out today to start the conversation!
