Home Loan Options for Utah Business Owners, 1099 Borrowers, Independent Contractors and Freelancers
Finding the right self-employed mortgage in Utah can be different from qualifying for a mortgage with traditional W-2 income. Business owners, independent contractors, freelancers, consultants, commission-based professionals and 1099 borrowers may have strong cash flow while their tax returns show less qualifying income because of legitimate business expenses and deductions.
At UtahLowRate.com, Utah Mortgage Broker Daniel Paris helps self-employed homebuyers and homeowners compare traditional and alternative-documentation mortgage programs throughout Utah.
Depending on your qualifications and the property, potential options may include conventional, FHA, VA, jumbo, bank statement, 1099, profit-and-loss, asset depletion, DSCR and other non-QM mortgage programs.
Whether you are buying a home, refinancing, purchasing a luxury property or investing in Utah real estate, the goal is to identify a mortgage program that appropriately evaluates the way you earn and document income.
Call Daniel Paris at 801-604-4949 to discuss self-employed mortgage options in Utah.
Can You Get a Mortgage in Utah if You Are Self-Employed?
Yes. Self-employed borrowers can qualify for mortgages in Utah. Some borrowers qualify using traditional tax returns and conventional underwriting, while others may be eligible for alternative-documentation programs using bank statements, 1099 income, profit-and-loss statements, qualifying assets or investment-property cash flow.
The right mortgage depends on your income structure, documentation, credit, assets, down payment or equity, property, occupancy, loan amount and applicable underwriting requirements.
Self-Employed Mortgage Utah: Quick Facts
| Mortgage Question | General Answer |
|---|---|
| Can self-employed borrowers buy a home? | Yes, subject to qualification |
| Are conventional loans available? | Yes |
| Can self-employed borrowers use FHA? | Yes, when eligible |
| Can eligible Veterans use VA financing? | Yes |
| Are jumbo loans available? | Yes |
| Can bank statements potentially document income? | Yes, under qualifying programs |
| Are 1099 mortgage programs available? | Certain programs may use 1099 income |
| Are P&L mortgages available? | Certain programs may use qualifying P&L documentation |
| Can assets potentially be used to qualify? | Certain asset-depletion programs allow this |
| Can investors use DSCR financing? | Yes, for qualifying investment-property transactions |
| Can some programs work without traditional tax-return income? | Potentially |
| Is underwriting required? | Yes |
What Is a Self-Employed Mortgage?
A self-employed mortgage is not one specific mortgage product.
Instead, the term describes home financing available to borrowers who earn some or all of their income through a business, contract work, commissions, 1099 earnings, partnerships, sole proprietorships, LLCs, corporations or other forms of self-employment.
Self-employed borrowers can include:
- Business owners
- Independent contractors
- Freelancers
- Consultants
- 1099 professionals
- Sole proprietors
- LLC members
- S corporation owners
- Partners
- Real estate agents
- Commission-based professionals
- Contractors and tradespeople
- Physicians with business income
- Attorneys and partners
- Transportation and trucking professionals
- Entrepreneurs
- Real estate investors
Being self-employed does not automatically mean you need a specialized mortgage.
Many self-employed borrowers can qualify for conventional, FHA, VA or jumbo financing using traditional income documentation.
For borrowers whose tax returns do not adequately reflect their current financial picture, alternative-documentation mortgages may provide additional options.
Why Can Mortgage Qualification Be Different for Self-Employed Borrowers?
Self-employed borrowers commonly deduct legitimate business expenses when filing their tax returns.
Those deductions can reduce taxable income.
For example, a business may have substantial gross revenue and healthy cash flow while the owner's taxable income is considerably lower after eligible expenses, depreciation and deductions.
Traditional mortgage underwriting must calculate qualifying income according to the requirements of the specific loan program.
That means gross business revenue cannot automatically be treated as personal qualifying income.
For some borrowers, traditional underwriting works very well.
For others, alternative-documentation programs may provide a different method for evaluating qualifying income.
What Mortgage Options Are Available to Self-Employed Borrowers in Utah?
Self-employed Utah borrowers may have several mortgage options.
The important question is not simply:
“Can I get a mortgage?”
A better question is:
“Which mortgage program provides an appropriate way to document my income and financial qualifications?”
Potential options include conventional, FHA, VA, jumbo, bank statement, 1099, P&L, asset depletion, DSCR and other non-QM mortgages.
Conventional Loans for Self-Employed Borrowers
A self-employed borrower may qualify for a conventional mortgage when sufficient eligible income can be documented under applicable conventional underwriting requirements.
Depending on the borrower's circumstances, documentation may include:
- Personal tax returns
- Business tax returns
- Profit-and-loss statements
- Balance sheets
- Business verification
- Bank or asset statements
- Other required financial documentation
A conventional mortgage should generally be evaluated before assuming that a more specialized alternative-documentation program is necessary.
FHA Loans for Self-Employed Borrowers
Qualified self-employed borrowers may also obtain FHA financing.
FHA loans can provide attractive options for qualifying owner-occupied borrowers, including relatively low down-payment possibilities.
Self-employment does not by itself disqualify someone from FHA financing.
However, eligible income must still be documented and analyzed according to applicable FHA and lender requirements.
VA Loans for Self-Employed Borrowers
Eligible Veterans, active-duty service members and other qualifying VA borrowers can potentially obtain VA mortgage financing while self-employed.
The borrower must still meet applicable requirements involving:
- VA eligibility
- Income
- Credit
- Occupancy
- Assets when required
- Entitlement
- Property eligibility
- Underwriting
An eligible self-employed Veteran should evaluate VA financing before assuming that a Non-QM mortgage is necessary.
Bank Statement Mortgage Loans for Self-Employed Borrowers in Utah
A bank statement mortgage in Utah is an alternative-documentation option that may help certain self-employed borrowers qualify using eligible deposits appearing in personal or business bank statements.
Instead of relying primarily on taxable income shown on traditional tax returns, qualifying bank statement programs may analyze cash flow through bank deposits.
Depending on the program, underwriting may review:
- Personal bank statements
- Business bank statements
- Eligible deposits
- Business expenses
- Deposit consistency
- Credit
- Assets
- Down payment
- Cash reserves
- Property type
- Occupancy
- Loan amount
- Loan-to-value ratio
Bank statement loans can be particularly relevant for established business owners whose taxable income does not fully represent their available business cash flow.
Who May Consider a Bank Statement Mortgage?
Potential candidates can include:
- Business owners
- Realtors
- Independent contractors
- Consultants
- Freelancers
- Construction professionals
- Tradespeople
- Attorneys
- Medical professionals
- Restaurant owners
- Retail business owners
- Trucking and transportation professionals
- Agency owners
- Online business owners
- Other qualifying self-employed borrowers
A bank statement loan is still a fully underwritten mortgage. Alternative documentation does not mean no documentation.
Can You Get a Mortgage Without Tax Returns in Utah?
Potentially, yes.
Certain alternative-documentation mortgage programs may allow qualified borrowers to obtain financing without relying on traditional tax-return income as the primary method of qualification.
Possible alternatives may include:
- Bank statement loans
- 1099 mortgage programs
- Profit-and-loss mortgages
- Asset depletion mortgages
- DSCR investment-property loans
- Other non-QM programs
These programs do not eliminate qualification requirements.
The lender may still evaluate credit, assets, reserves, down payment or equity, property, occupancy, income documentation and the borrower's overall financial profile.
1099 Mortgage Loans for Self-Employed Borrowers
Independent contractors and other borrowers who receive 1099 income may have several ways to qualify for a mortgage.
Some 1099 borrowers can qualify through traditional mortgage underwriting.
Others may benefit from a specialized 1099 mortgage loan that evaluates eligible 1099 earnings according to that program's income methodology.
Underwriting can consider factors such as:
- History of receiving 1099 income
- Stability of earnings
- Time in the same or similar line of work
- Credit
- Assets
- Down payment
- Cash reserves
- Property
- Occupancy
- Loan amount
This can be valuable for an independent contractor who's gross 1099 earnings are strong, but whose taxable income is reduced by legitimate business expenses.
Profit and Loss Mortgage Loans in Utah
A profit and loss mortgage, commonly called a P&L mortgage, may provide another income-documentation option for certain business owners.
Depending on the specific program, qualifying income may be evaluated using an eligible profit-and-loss statement along with any additional documentation required by the lender.
A P&L mortgage can be worth considering when the borrower's current business performance differs substantially from income shown on previous tax returns.
P&L mortgage requirements vary significantly between programs, so the documentation should be reviewed before determining whether this approach is appropriate.
Asset Depletion Mortgages for Self-Employed Borrowers
Not every financially strong borrower earns a large traditional monthly salary.
Some self-employed borrowers have accumulated substantial savings and investments.
An asset depletion mortgage may allow qualifying assets to be converted into an income calculation according to the mortgage program's requirements.
Potential candidates can include:
- Business owners
- Entrepreneurs
- Retirees
- Investors
- High-net-worth borrowers
- Borrowers with substantial savings
- Borrowers with significant investment assets
Asset depletion can be particularly useful when a borrower has substantial wealth but limited traditional employment income.
DSCR Loans for Self-Employed Real Estate Investors
Self-employed real estate investors should also understand DSCR loans.
DSCR stands for Debt Service Coverage Ratio.
Unlike an owner-occupied mortgage that generally depends heavily on the borrower's personal qualifying income, a DSCR mortgage generally focuses on the qualifying rental property's income relative to its required housing payment.
This can make DSCR financing particularly relevant for business owners and self-employed borrowers purchasing or refinancing qualifying rental properties.
DSCR mortgages are generally intended for investment properties rather than primary residences.
Jumbo Mortgage Loans for Self-Employed Borrowers
Self-employed borrowers purchasing higher-value homes may need jumbo mortgage financing.
Jumbo underwriting varies considerably by lender and mortgage program.
Depending on the program, income documentation may include traditional tax returns or alternative methods such as:
- Bank statements
- Assets
- Profit-and-loss documentation
- Other approved alternative documentation
Jumbo underwriting may place significant emphasis on:
- Credit
- Liquid assets
- Cash reserves
- Down payment
- Loan-to-value ratio
- Property value
- Income stability
- Documentation
- Overall financial strength
Self-employed jumbo financing can be especially relevant for luxury-property buyers in Park City, Deer Valley, Salt Lake City, Holladay, Draper, Alpine, Highland, Heber City, Midway and St. George.
Self-Employed Mortgage Comparison
| Mortgage Program | Primary Qualification Approach | May Be Appropriate For |
|---|---|---|
| Conventional | Traditional documented income | Borrowers whose tax-return income supports qualification |
| FHA | FHA-approved income documentation | Qualified owner-occupied borrowers |
| VA | VA-approved income documentation | Eligible Veterans and qualifying VA borrowers |
| Jumbo | Traditional or program-specific documentation | Higher-value properties |
| Bank Statement | Eligible bank deposits | Self-employed business owners |
| 1099 | Eligible 1099 earnings | independent contractors and 1099 earners |
| P&L | Qualifying profit-and-loss documentation | Established business owners |
| Asset Depletion | Eligible Assets | Asset-rich borrowers |
| DSCR | Qualifying property cash flow | Real estate investors |
| Non-QM | Program-specific alternative documentation | Borrowers requiring alternatives to traditional documentation |
What Documents Do Self-Employed Mortgage Borrowers Need?
Required documentation depends on the mortgage program.
You may be asked for some combination of:
- Personal tax returns
- Business tax returns
- W-2 forms
- 1099 forms
- Profit-and-loss statements
- Balance sheets
- Personal bank statements
- Business bank statements
- Business licenses
- Verification of business
- CPA or tax-preparer documentation
- Investment statements
- Retirement-account statements
- Other asset documentation
- Identification
- Purchase contract
- Current mortgage statements
- Homeowners insurance information
- Additional underwriting documents
Alternative-documentation programs may reduce reliance on certain traditional income documents, but borrowers must still provide the documentation required by the lender and mortgage program.
How Do You Qualify for a Self-Employed Mortgage in Utah?
1. Determine How Your Income Is Earned
Start by identifying all income sources.
These may include business ownership, partnerships, contract work, 1099 income, commissions, rental properties or multiple businesses.
2. Determine How Your Income Can Be Documented
Compare traditional tax-return qualification with available alternative-documentation options.
3. Review Your Credit
Credit can affect mortgage eligibility, pricing, down-payment requirements and available loan programs.
4. Review Your Assets and Reserves
Available cash, savings, investments and other eligible assets can be important to mortgage qualification.
5. Determine Your Property and Occupancy
The financing available for a primary residence can differ from financing for a second home or investment property.
6. Compare Mortgage Programs
Evaluate conventional, FHA, VA and jumbo financing before determining whether bank statement, 1099, P&L, asset depletion, DSCR or another Non-QM program is preferable.
7. Get pre-approved
A mortgage pre-approval can identify potential documentation issues and establish an estimated purchase range before you make an offer.
8. Complete Underwriting
Final mortgage approval remains subject to underwriting, acceptable documentation, lender and investor requirements, property eligibility and appraisal when applicable.
Self-Employed Mortgage Pre-Approval in Utah
Getting pre-approved can be especially important for a self-employed homebuyer.
A pre-approval can help determine:
- Estimated purchasing power
- Potential loan amount
- Down-payment requirements
- Estimated housing payment
- Cash-reserve requirements
- Required income documentation
- Whether traditional underwriting may work
- Whether alternative documentation should be evaluated
The earlier income is reviewed, the more time there is to identify potential documentation issues before making an offer on a Utah home.
Self-Employed Mortgage Loans for Buying a Home
Self-employed borrowers can use qualifying mortgage programs to purchase many types of Utah residential properties.
Depending on the mortgage program, property and borrower qualifications, financing may be available for:
- Primary residences
- Second homes
- Luxury homes
- Condominiums
- Townhomes
- Single-family homes
- Qualifying multi-unit residential properties
- Investment properties
Property eligibility varies by program.
Self-Employed Mortgage Refinance Options in Utah
Self-employed homeowners may also qualify for mortgage refinancing.
Depending on the borrower's objectives and qualifications, refinancing may be considered to:
- Change the mortgage rate
- Change the loan term
- Replace an existing mortgage
- Access available home equity
- Consolidate qualifying debt
- Move into a different mortgage program
Whether refinancing makes financial sense depends on the new interest rate, APR, closing costs, loan term, existing mortgage balance, property value and homeowner's objectives.
Can Self-Employed Homeowners Get a Cash-Out Refinance?
Yes, qualified self-employed homeowners may be eligible for cash-out refinancing.
Available loan-to-value limits, credit requirements, income documentation, reserves and loan amounts depend on the mortgage program.
A homeowner considering cash-out financing should compare the cost of refinancing the existing first mortgage against other available financing alternatives.
Self-Employed Mortgage Loans Throughout Utah
UtahLowRate.com helps qualified self-employed homebuyers and homeowners throughout Utah.
Service areas include:
Salt Lake City, Murray, Holladay, Millcreek, Cottonwood Heights, Sandy, Draper, South Jordan, West Jordan, Riverton, Herriman, Bluffdale, Park City, Heber City, Midway, Lehi, Alpine, Highland, American Fork, Pleasant Grove, Provo, Orem, Saratoga Springs, Eagle Mountain, Ogden, Layton, Farmington, Bountiful, St. George, Washington, Ivins, Santa Clara and Hurricane.
This statewide page should serve as the primary Self-Employed Mortgage Utah resource, while individual city and county pages can provide more specific local information.
Why Work with Daniel Paris at UtahLowRate.com?
Self-employed mortgage financing can involve more than simply finding a lender.
The important part is determining which available mortgage program appropriately evaluates your particular income structure.
Daniel Paris with UtahLowRate.com has more than 27 years of mortgage lending experience and works with Utah borrowers to evaluate traditional and alternative-documentation financing.
Instead of assuming every business owner needs a non-QM mortgage, Daniel can help compare available options including:
Jumbo and Super Jumbo Mortgages
Asset-Based and Asset Depletion Mortgages
DSCR Investment Property Loans
Non-QM Mortgages
Purchase and Refinance Loans
Contact Daniel Paris
Daniel Paris
Utah Mortgage Broker
UtahLowRate.com
801-604-4949
Frequently Asked Questions About Self-Employed Mortgages in Utah
Can I qualify for a mortgage if I am self-employed?
Yes. Self-employed borrowers can qualify for mortgages when they satisfy the applicable income, credit, asset, property and underwriting requirements.
Is it harder to get a mortgage when you are self-employed?
It can require additional income analysis because business income and tax returns can be more complex than a traditional W-2 salary. Being self-employed, however, does not prevent someone from qualifying for a mortgage.
Do self-employed borrowers always need two years of tax returns?
Not necessarily. Documentation requirements depend on the mortgage program. Certain alternative-documentation programs may use bank statements, 1099 earnings, P&L statements, eligible assets or other approved documentation.
Can I get a mortgage without tax returns in Utah?
Potentially. Qualified borrowers may have access to bank statement, 1099, P&L, asset-depletion, DSCR or other Non-QM programs that do not rely primarily on traditional tax-return income.
Can I use business bank statements to qualify for a mortgage?
Certain bank statement mortgage programs may allow eligible business bank statements to be used to calculate qualifying income. The lender's deposit and business-expense methodology will apply.
What is a bank statement mortgage?
A bank statement mortgage is an alternative-documentation mortgage that may allow eligible self-employed borrowers to establish qualifying income using eligible deposits shown on personal or business bank statements.
Can a 1099 worker qualify for a mortgage?
Yes. Some 1099 borrowers qualify through conventional or other traditional underwriting, while others may benefit from specialized 1099 mortgage programs.
Can a self-employed borrower get an FHA loan?
Yes. Qualified business owners and other self-employed borrowers may obtain FHA financing when they meet applicable FHA and lender requirements.
Can an eligible self-employed Veteran obtain a VA mortgage?
Yes. Self-employment does not prevent an otherwise eligible VA borrower from obtaining VA financing when applicable qualification requirements are satisfied.
Can self-employed borrowers qualify for jumbo mortgages?
Yes. Qualified self-employed borrowers may obtain jumbo mortgages using traditional documentation or, with certain programs, approved alternative income documentation.
Can a self-employed investor use a DSCR loan?
Potentially. DSCR financing is designed for qualifying investment-property transactions and generally focuses on property cash flow rather than traditional personal employment income.
Are mortgage rates higher if I am self-employed?
Not simply because a borrower is self-employed. Mortgage pricing depends on factors including the loan program, documentation method, credit, loan amount, property, occupancy, loan-to-value, market conditions and other risk characteristics.
Alternative-documentation and non-QM programs may be priced differently from traditional agency mortgages.
What credit score do I need for a self-employed mortgage?
There is no single credit-score requirement covering every self-employed mortgage. Requirements vary between conventional, FHA, VA, jumbo, bank statement, 1099, P&L, DSCR and other programs.
What is the best mortgage for a self-employed borrower?
There is no single best self-employed mortgage. The appropriate program depends on the borrower's income structure, documentation, credit, assets, down payment or equity, property, occupancy, loan amount and financial objectives.
Talk to a Utah Mortgage Broker About Self-Employed Home Loans
If you are self-employed and planning to buy a home, refinance a mortgage, purchase a luxury property or finance a qualifying Utah investment property, comparing the available income-documentation methods can be an important first step.
Daniel Paris can help evaluate whether traditional financing or an alternative-documentation mortgage may be appropriate for your situation.
Get a Self-Employed Mortgage Quote
Daniel Paris
Utah Mortgage Broker
UtahLowRate.com
801-604-4949
Ask about:
Self-Employed Mortgages • Bank Statement Loans • 1099 Loans • P&L Mortgages • Conventional • FHA • VA • Jumbo • Super Jumbo • Asset Depletion • DSCR • non-QM • Purchase • Refinance
Mortgage programs, rates, fees, documentation requirements, credit requirements, down payments, reserves, loan-to-value limits and underwriting guidelines can change. All financing is subject to borrower qualification, acceptable documentation, property eligibility, lender and investor requirements, appraisal when applicable and final underwriting approval.
