How to Buy a Home as a Freelancer or Self-Employed

Ron Contreras
Jul 2
2 min read

Being your own boss comes with freedom — but when it’s time to buy a home, that freedom can feel like a roadblock.

Lenders often treat freelance income as “risky,” and qualifying for a mortgage without W-2s can be tricky. But good news: self-employed buyers can absolutely qualify for a home loan — they just need to be a little more prepared.

Here’s everything you need to know to buy a home confidently when you’re self-employed or a freelancer.

1. Understand What Lenders Want

Lenders want to see:

Consistent, verifiable income
Low debt-to-income ratio (DTI)
Good credit score
Two years of self-employment history

They’re looking for stability and reliability, even if your income varies from month to month.

2. Gather Strong Documentation

Here’s what most lenders will ask for:

2 years of personal tax returns
2 years of business tax returns (if you own an LLC, S-corp, or other entity)
Profit & Loss (P&L) statements
Bank statements (3–6 months)
Client contracts or 1099s (optional but helpful)

Tip: Avoid writing off too much on your taxes. High deductions = lower taxable income = harder loan approval.

3. Improve Your Credit and Reduce Debt

As a self-employed buyer, a strong credit score and low monthly debts go a long way in making you look less risky.

Aim for:

Credit score of 700+ for the best rates
DTI under 43% (or even lower if your income fluctuates)

4. Consider a Higher Down Payment

Putting more money down can:

Increase your chances of approval
Lower your monthly payments
Show the lender you’re financially stable

20% down is ideal if possible, but many self-employed buyers still qualify with 10–15% or less depending on the loan program.

5. Know Your Loan Options

While traditional loans work for many freelancers, these options might help:

Bank Statement Loans: Use 12–24 months of bank deposits to prove income instead of tax returns
Stated Income Loans (less common): Used by buyers with very strong credit and high down payments
Non-QM Loans: For non-traditional borrowers who don’t meet standard guidelines

Talk to a mortgage broker who specializes in self-employed borrowers — they’ll help you find the right fit.

6. Stay Organized and Keep Business Finances Separate

Mixing personal and business income creates confusion — and red flags.

Best practices:

Use a separate business account
Keep clean bookkeeping and invoicing records
Don’t co-mingle funds unless absolutely necessary

7. Avoid These Common Mistakes

Waiting until the last minute to get pre-approved
Over-deducting on taxes to look “broke”
Not having savings for taxes, emergencies, or closing costs
Applying for new credit during the loan process

Final Thought

Buying a home as a freelancer or self-employed person takes extra prep — but it’s 100% doable.If you’re organized, transparent, and work with the right professionals, your dream

home is well within reach.

Need help connecting with a lender who understands self-employed income? I can point you in the right direction and guide you from pre-approval to closing.

Let’s make it happen — on your terms.