1. Home
  2. Blog
  3. Mortgage Basics
  4. Getting a Mortgage When Self-Employed – Proving Your Income
Getting a Mortgage When Self-Employed – Proving Your Income - Quicken Loans Zing Blog

Here we are with part two of our blog series for those of you who want to get a mortgage and are self-employed.

Yesterday, I talked about the definition of self-employed and how to verify if you’re actually self-employed. Today, I’m going over the extremely important verification of income for the self-employed.

I’ll repeat what I said yesterday: If you work in a typical job for a company that provides you a steady income, you’re all set. When getting a mortgage, just show your pay stubs and your W-2s and you’ll be good to go. I’m simplifying things (there could be exceptions, of course), but when you work for others, you shouldn’t really have a problem.

Things get a little different when you’re self-employed. Verifying your income requires us to ask for several tax documents and other official forms that prove you’re still actively employed. Like I said above, when you work for a company, it’s very easy for us to verify your income. When you’re self-employed, there are a few extra things you’ll have to show us to make sure we know the mortgage is a legitimate and follows all underwriting guidelines. The full list is below, but it includes such items as tax forms, bond insurance, business licenses, etc.

Knowing these documents will be required ahead of time will help you prepare for your mortgage and make thing MUCH faster. Trust me on that. Of course, your Home Loan Experts will help you every step of the way and set expectations up front on what you’ll need to qualify (particular to your loan and situation), but knowing as much as possible going into the process will help speed things tremendously.

Here’s the list of the things you may need to show us to verify your income when you’re self-employed:

Tax Forms a Mortgage Lender May Require You to Present to Prove Self-Employment

Schedule C

  • Used to document profit or loss from a business
  • Typically filed when your business is a sole proprietorship

Schedule E

  • Used for rental real estate, royalties, partnerships, S corps, estates, trusts and REMICs (Real Estate Mortgage Investment Conduit)

Form 1120S

  • S Corporation
  • Report of profit or loss


  • Shareholder’s or partner’s percentage of profit or loss

Profit and loss statement

  • A financial statement that summarizes the revenues, costs and expenses incurred during a specific period of time.

Additional Documents that May be Requested by the Lender

Finally, here are some other documents that a mortgage lender may ask you to show. Some might seem a little extreme, but they help make sure the loan is legal and legitimate. It’s a good idea to have these ready to go when applying for a mortgage if you’re self-employed. Keep in mind, these requirements can vary by state, so check with us if you have any questions.

Business license

  • Issued by state, city or county
  • Mortgage applicant named as business owner
  • Name of business (if applicable)

Letter from companies that a self-employed mortgage applicant services

  • Minimum of one letter must come from a legitimate business
  • Any type of self-employed person working on a service level or contract basis:
    • On letterhead
    • Contact information for business
    • Name of mortgage applicant
    • Type of service used
    • Dates of service

Bond insurance

  • For example:  builders, contractors, repair workers, car dealers, paralegals, brokers/lenders
    • Mortgage applicant named as policy holder
    • Date policy was instated (must be at least two years ago)

Membership in professional organization in his/her line of work

  • Ex. ADA (Dentist), AMA (Medical Doctor), Realtors, Builders
    • Letter on letterhead including:
      • Contact information for organization
      • Client’s name
      • Verification that you’re currently self-employed (at least two years)

DBA (Doing Business As)

  • Issued by state, city or county containing:
    • Date DBA was obtained (at least two years)
    • Mortgage applicant named as business owner
    • You may be required to provide additional docs for current self-employment

Signed CPA letter

  • Verify existence and ownership of business
  • Verification of the CPA included

Signed EA letter

  • Verify existence and ownership of the business

Signed letter from tax preparer with PTIN (Preparer Tax Identification Number)

  • Should verify existence of business and ownership of business

Workers comp or employer’s liability insurance

  • Current statement that contains:
    • Evidence policy is active
    • Client named as policy holder

We know this is a long list, but our goal is to get you the best mortgage to reach your financial goals even if you’re self-employed. We hope this info up front helps make that happen.

As always, please ask us any questions you may have below. We’ll answer them or get you in touch with someone who can help.  And, let us know if there is anything you think we missed that should be on here as a resource for helping self-employed mortgage applicants qualify. Thanks for reading!


This Post Has 15 Comments

  1. hi I need your help please I am going for a loan but I am self employed but the loan underwriter want a letter to prove my self employed can you help to do this letter please

  2. Thanks for posting this info. Ive run into a lot of headache being a self-employed mortgage hunter but man Im sick of paying rent!! The main problem I am seeing is that lenders go by taxable income. Well, guess what? It’s the job of a competent entrepreneur to get his taxable income real low, preferably $0, and I’ve done it! So to a mortgage lender I make no money. Hmmmm. This also means that the year that GE Corp reported $0 taxable income that they made no money as far as a mortgage lender sees it. How can I get around this snare without having to work for someone as an employee for two years and without forfeiting credits, exemptions, and deductions, thus paying an arm and a leg to Uncle Sam?

    1. Hi Brian:

      I sympathize with your frustration. Whether you’re an entrepreneur or not, I think it’s the goal of all of us to pay as little in taxes as we can legally get away with. I’m not an entrepreneur, but it’s definitely my goal to keep my money.

      That said, the mortgage industry is highly regulated. More importantly, we want to make absolutely sure that we put you in a loan you can afford. It’s our goal to set each of our clients up for success. Both legally and from a common sense ethical standpoint, we need you to be able to prove your income in order to make sure the loan is the best thing for you. One of the ways we do that is by taking a look at your tax returns. I think the best thing to do would be to speak with one of our Home Loan Experts. They can go over all the options and see if we have any loan products that make sense for you at this time. Whether or not we can help you right now, we can talk about what you may be able to do to set yourself up for the best chance of approval in the future. You can get in touch with them by filling out this form or calling (888) 980-6716.

      Kevin Graham

    2. I am curious what you found out Brian. I am in the same situation and have been trying to explain to my lender how utterly stupid it would be to not take the exemptions through my business and have to pay tens of thousands in taxes just to “prove” my income. I would essentially be paying an extra $30,000 just to apply for a loan. I feel like I am being punished for being financially smart and ensuring that my business (which is my only source of income) succeeds so that I CAN pay my bills. It’s a really stupid catch 22.

      1. Hi Amanda:

        While we cannot share the specifics of any particular client situation for privacy reasons, it would probably be of limited use to you anyhow. Everyone’s situation is a little different. That said, I absolutely understand the challenges of your situation and why you feel the way you do. I’m going to recommend you speak with one of our Home Loan Experts to make sure you can get the best possible information and we work and every option for you. You can get in touch with us at (888) 980-6716.

        Kevin Graham

        1. Other banks do NOT use taxable income as their income criteria. It makes no sense, as it does not reflect true income at all. Other banks use gross income, or adjusted gross income, which is far more reflective of actual income earned and used by a business owner. Why is Quicken using a different criteria for this?

          1. Hi Lois:

            We do use gross income. However, that gross income is often derived from your W-2, or in the case of self-employment, different tax records like a Schedule C or K-1 or similar depending on the way your business is set up.

  3. If a person is employed AND owns a business that is a non-profit corporation, is there a way to use the income from the business to help with a home purchase loan? If so, how?

    1. If it’s a nonprofit corporation, the income may be treated slightly differently. I’m going to suggest you reach out to one of our Home Loan Experts by calling (888) 980-6716.

      Kevin Graham

  4. Your info was some what helpful however not for my situation. I’m a commercial truck driver. My last several years tax returns have all been W2s. Three months ago I took a job with a company that classifies me as a “Contract Driver” with a 1099. I’m not self employed, I don’t own a company, I don’t own the truck, I don’t have any control of anything. I’m simply a driver that works for one company and recieves a weekly pay check like a regular employee, I just have to pay my own taxes and pay for my own workers comp. Insurance. How can I get a lender to give me a loan. Since I’ve only been 1099 for 3months would it hurt to change jobs again and go back to a W2 job?
    Tim Green

    1. Hi Tim:

      Because every situation is different, I think the best thing to do is put you in touch with one of our Home Loan Experts. Someone will be in contact. Thanks!

      Kevin Graham

      1. Hi Felicia:

        While we can’t comment on whether other clients get qualified, we handle applications based on 1099s all the time. If you want to get started, you can do so through Rocket Mortgage or give us a call at (888) 980-6716.

        Kevin Graham

Leave a Reply

Your email address will not be published. Required fields are marked *