January 30th, 2025 12:25 PM by Ken Morley
For self-employed individuals, securing a traditional mortgage can be challenging due to fluctuating income and complex tax returns. Fortunately, Non-QM (Non-Qualified Mortgage) loans offer alternative options, allowing self-employed borrowers to qualify based on bank statements and profit & loss (P&L) statements rather than tax returns. Non-QM loans are designed for borrowers who do not meet the stringent requirements of conventional mortgages.
Bank statement loans allow self-employed borrowers to qualify using personal or business bank statements instead of tax returns. Lenders typically review 12 to 24 months of bank statements to assess income stability. They analyze deposits to determine an average monthly income, avoiding deductions that often reduce taxable income on tax returns.
No tax returns required.
Use of 12 to 24 months of bank statements for income verification.
Higher loan amounts and competitive rates.
Ideal for business owners, freelancers, and independent contractors.
A Profit & Loss (P&L) statement is another option for self-employed borrowers. Some lenders accept a CPA-prepared or borrower-prepared P&L statement to verify income, often in combination with bank statements.
Provides a comprehensive view of business revenue and expenses
Allows flexibility for businesses with seasonal income
May require fewer months of bank statements compared to standard bank statement loans
Each borrower’s financial situation is unique, so it’s essential to work with a lender who understands Non-QM products. Factors such as credit score, down payment, and business type will impact the available loan options. If you’re a self-employed individual struggling to secure a mortgage through traditional means, a Non-QM loan using bank statements or P&L statements could be the perfect solution. Reach out to us at (303) 650-9400 or start by filling out our on-line application to explore your options!