Self-Employed Mortgage Guide
Complete resource for business owners, 1099 contractors, and freelancers in Bergen County seeking home financing
Self-Employed Home Buying in Bergen County
Bergen County's thriving business community includes thousands of self-employed professionals, entrepreneurs, and contractors seeking home financing. With a median home price of $749,714 and diverse property options from Ridgewood to Fort Lee, self-employed borrowers need specialized mortgage solutions that accommodate non-traditional income documentation.
Whether you're a business owner with significant write-offs, a 1099 contractor with variable income, or a freelancer building your business, multiple mortgage programs can help you achieve homeownership in Bergen County's competitive real estate market.
Self-Employed Mortgage Programs
Traditional Documentation
2 years tax returns (personal + business), profit & loss statements, CPA letter. Best rates for borrowers with consistent reported income.
- Conventional, FHA, VA programs
- Down payment from 3.5%
- Lowest interest rates
- Current rate: 6.40% (30yr)
Bank Statement Loans
12-24 months business bank statements replace tax returns. Qualify based on deposits, not taxable income. Ideal for high write-offs.
- No tax returns required
- 10-20% down payment
- Income from deposits
- Flexible underwriting
DSCR Investor Loans
Rental property loans based on property income (Debt Service Coverage Ratio). No personal income documentation needed.
- No tax returns or W-2s
- 20-25% down payment
- Investment properties only
- Unlimited properties
Documentation by Business Type
Sole Proprietor / 1099 Contractor
- 2 years personal tax returns (1040s with Schedule C)
- 1099 forms for 2 years (if applicable)
- Year-to-date profit & loss statement
- Business bank statements (2-3 months)
- Business license or DBA registration
LLC / S-Corp / Partnership
- 2 years personal tax returns (1040s)
- 2 years business tax returns (1065/1120/1120S)
- K-1 forms showing ownership percentage
- YTD profit & loss and balance sheet
- Business bank statements and CPA letter
Income Calculation Method
Lenders calculate self-employed income by averaging the net income (after expenses) from your tax returns over 24 months. If your business shows declining income, this may impact qualification. Bank statement loans avoid this issue by qualifying you based on gross deposits rather than net taxable income.
Strategies to Strengthen Your Application
Minimize Write-Offs
In the 2 years before applying, reduce business expense deductions to show higher net income on tax returns.
Organize Documents
Prepare complete tax returns, P&L statements, and bank statements 3-6 months before application.
Show Stability
Demonstrate 2+ years in the same industry with consistent or growing income trends.
Larger Down Payment
20%+ down payment improves approval odds and may eliminate PMI requirement on conventional loans.
Frequently Asked Questions
Can I get a mortgage if I'm self-employed in Bergen County?
Yes, self-employed borrowers can qualify for mortgages in Bergen County through multiple programs. Traditional loans require 2 years of tax returns and business financials. Alternative options include bank statement loans (12-24 months of bank deposits), DSCR loans (rental property focus), and portfolio documentation programs designed specifically for business owners, 1099 contractors, and freelancers.
How many years of tax returns do I need for a self-employed mortgage?
Most conventional and government-backed loans require 2 years of personal and business tax returns (1040s with Schedule C, 1065, or 1120S depending on business structure). Lenders average the net income over 24 months. Bank statement loan programs can qualify you with 12-24 months of business bank statements instead of tax returns, beneficial if you write off significant expenses.
What is a bank statement loan program?
Bank statement loans allow self-employed borrowers to qualify using 12 or 24 months of business bank statements instead of tax returns. Lenders calculate income from deposits, typically using 50% of deposits as qualifying income (accounting for business expenses). This benefits business owners who write off substantial expenses, reducing taxable income but maintaining strong cash flow. Down payments typically range from 10-20%.
What documentation do self-employed borrowers need for a mortgage?
Traditional self-employed mortgage documentation includes: 2 years personal tax returns (1040s with all schedules), 2 years business tax returns (1065/1120/1120S), year-to-date profit & loss statement, business bank statements (2-3 months), CPA letter or business license, and proof of business continuity (contracts, client list). Alternative programs may require only bank statements, asset verification, or rental income documentation (DSCR loans).
Can 1099 contractors get mortgages in New Jersey?
1099 contractors can qualify for mortgages in New Jersey using their tax returns showing contract income. Lenders require 2 years of 1099 history in the same field to establish income stability. If 1099 income varies significantly or you write off major expenses, bank statement loan programs offer an alternative by qualifying you based on actual deposits rather than net taxable income reported on Schedule C.
What is a DSCR loan for self-employed investors?
DSCR (Debt Service Coverage Ratio) loans qualify self-employed investors based on rental property income, not personal income documentation. The property's rental income must cover the mortgage payment (DSCR of 1.0 or higher). No tax returns, W-2s, or pay stubs required. Ideal for self-employed investors with multiple properties, strong cash flow but lower reported taxable income. Typical down payments: 20-25%.
Ready to Explore Self-Employed Mortgage Options?
Schedule a free consultation to review your business income, documentation, and find the best mortgage program for your situation.