How to Get Pre-Approved for a Mortgage When Self-Employed

If you’re self-employed, a 1099 worker, or a business owner, you’ve probably already learned that your financial path looks a little different than someone earning a traditional W-2 salary. And when it comes to buying a home, that difference can feel even more frustrating—especially if no one has told you what to expect.

So let me say this clearly: If you want to get pre-approved for a mortgage when self-employed, you need to start planning early—years early.

This isn’t about scaring you. It’s about making sure you’re fully prepared when the time comes to buy a home for you and your family. Here’s how the process works, and why it’s so important to get ahead of it.

Why Self-Employed Borrowers Are Viewed Differently

If you’re a W-2 employee, let’s say a schoolteacher, your income looks very predictable to a mortgage underwriter. They know how much you make, when you get paid, and that your income likely won’t fluctuate wildly.

But when you’re self-employed, your income can vary. You might earn a lot one year and much less the next. And that makes lenders cautious. They’re not just trying to determine whether you can buy the house, they’re focused on whether you can consistently make the payment for years to come.

This is why self-employed borrowers face more scrutiny when it comes to verifying income and qualifying for a mortgage.

What Documentation Do You Need?

The short answer? Two years of tax returns. And not just any paperwork, it’s your actual, filed tax returns. These are the documents underwriters rely on to understand your income, expenses, and how steady your business really is.

Here’s the catch: once your tax returns are filed, you can’t change them. So the way you report your income today can directly affect your ability to get pre-approved down the road.

That’s why I tell every self-employed client: Don’t wait until you’re ready to buy. Talk to a mortgage professional one to two years in advance.

Your CPA and Your Loan Goals Might Not Align

This part is crucial. Most self-employed borrowers work with a CPA whose job is to lower their tax burden, and rightly so. But minimizing your income on paper can also reduce how much home you qualify for.

If your CPA writes off too much income or expenses, you may look less “qualified” on paper even if you can absolutely afford the home.

The solution isn’t to pay more taxes than you need to. It’s to work with a mortgage advisor early enough to strategically plan your tax filings, so you don’t unintentionally disqualify yourself when it’s time to buy.

When Should You Start the Pre-Approval Process?

Now. Even if you’re not buying for 2–3 years.

The earlier we start the conversation, the more options you have to adjust your finances and prepare for a successful pre-approval. That may mean restructuring your income, limiting certain deductions, or making a plan with both your loan officer and CPA so everyone is on the same page.

If you wait until you’re ready to buy, it might be too late to fix the things that are holding you back. And that could mean missing out on the home your family really wants.

Work With Someone Who Understands Self-Employed Borrowers

Not every loan officer understands the complexity of self-employed mortgage pre-approval. This is not the time to go with a call center or a brand-new lender.

You need someone who has worked with hundreds of self-employed clients, understands how underwriters evaluate non-traditional income, and can help you map out a plan that actually works.

This is one of the most important financial moves you’ll make. Don’t leave it up to chance.

Final Thoughts

If you’re trying to figure out how to get pre-approved for a mortgage when self-employed, the most important thing you can do is start early and start with the right guidance. I’ve helped many self-employed buyers in Birmingham and beyond navigate this process and I’d love to help you do the same.

If you have questions about your income, taxes, or how close you are to qualifying, let’s talk. Give me a call, send a message, or come by the office. We can build a plan that helps you buy with confidence on your timeline.