Self-Employed? Why You Need a Wholesale Mortgage Broker [2026]

The Self-Employed Mortgage Challenge

If you're self-employed, you've likely experienced this frustration: your business is thriving, your bank account is healthy, but banks tell you that you don't qualify for the mortgage you need. Here's why:

Tax Returns Understate Your Real Income

Smart business owners minimize taxable income through legitimate deductions:

• Home office deductions
• Vehicle expenses
• Equipment depreciation
• Business travel
• Professional services
• Health insurance premiums

These deductions reduce your tax burden—but they also reduce the income banks see when reviewing your tax returns.

Banks Use Only Tax Return Income

Traditional banks have one way to calculate self-employed income: tax returns. Their system doesn't account for:

• Business growth not yet reflected in taxes
• Strategic tax planning that reduces reported income
• Seasonal income variations
• Multiple income streams

Single-Lender Denial = Dead End

When a bank denies your application, you have one option: start over somewhere else. With a wholesale broker, if one lender says no, you can try another lender the same day—each of 200+ lenders has different guidelines.

How Wholesale Brokers Solve Self-Employed Challenges

1. Bank Statement Loans

Bank statement loans use 12-24 months of actual bank deposits to calculate income instead of tax returns.

How It Works

• Personal accounts: 100% of deposits counted as income
• Business accounts: Deposits multiplied by expense factor (50-90%)
• Income calculation: Average monthly deposits over 12-24 months
• No tax returns required: Bank statements replace tax documentation

Bank Statement Loan Requirements (Typical)

The Wholesale Advantage

Wholesale brokers access 50+ bank statement lenders, each with different:

• Income calculation methods (gross vs. net deposits)
• Expense factors for business accounts
• Credit score requirements
• Statement requirements (12 vs. 24 months)
• Maximum loan amounts

If one lender's calculation doesn't work, another's formula might qualify you for more.

Learn more: Bank Statement Loans Complete Guide

2. Asset Depletion Loans

Asset depletion loans use your investment portfolio, retirement accounts, and other assets to qualify—perfect for high net worth self-employed individuals with significant savings.

How Asset Depletion Works

• Assets are divided by a set period (typically 360 months)
• Result is treated as monthly income
• Example: $2 million in assets ÷ 360 = $5,555/month income

Eligible Assets

• Checking and savings accounts
• Investment accounts (stocks, bonds, mutual funds)
• Retirement accounts (IRA, 401k) with adjustments
• Cash value of life insurance

3. Profit & Loss Statement Loans

Some lenders accept CPA-prepared profit and loss statements instead of tax returns:

• 1-2 years of P&L statements
• CPA letter verifying business income
• Some lenders accept 1 year self-employment
• More flexible than traditional documentation

4. 1099 Income Loans

For contractors and freelancers who receive 1099 forms:

• Use 1099 forms instead of tax returns
• 1-2 years of 1099 income
• Simpler than bank statement documentation
• Good for gig economy workers

Why Banks Fail Self-Employed Borrowers

The 200+ Lender Advantage for Self-Employed

Each of 200+ wholesale lenders has different guidelines. This matters enormously for self-employed borrowers:

Different Income Calculations

• Lender A may use 50% expense factor; Lender B uses 70%
• Lender A requires 24 months statements; Lender B accepts 12
• Lender A averages all deposits; Lender B excludes transfers

Different Credit Requirements

• Some specialize in 620-660 credit scores
• Others offer better rates for 700+
• Different approaches to credit events

Different Loan Limits

• Some cap at $2 million
• Others go to $5 million+
• Varying jumbo requirements

Real-World Impact

A self-employed borrower might qualify for $500,000 with one lender's calculation but $750,000 with another's—same borrower, same documentation, different result. Wholesale brokers find the best fit.

Self-Employed Borrower Checklist

Prepare these items before applying:

1. Bank Statements (12-24 months)
   • All pages of personal and/or business accounts
   • Statements from the same account over the full period
   • Consistent deposit patterns help
2. Business Documentation
   • Business license
   • 2+ years of self-employment history
   • CPA letter (if using P&L program)
3. Credit Profile
   • Target 680+ for best options
   • 620 minimum for many programs
   • Pay down credit card balances before applying
4. Down Payment
   • 10-20% typical
   • Seasoned funds (in account 60+ days)
   • Gift funds may be allowed
5. Reserves
   • 3-12 months of payments in reserve
   • Retirement accounts may count
   • Investment accounts may count

Types of Self-Employed Borrowers We Help

Business Owners

• LLC and S-Corp owners
• Sole proprietors
• Partnership members
• Franchise owners

Freelancers & Contractors

• 1099 contractors
• Gig economy workers
• Consultants
• Creative professionals

Real Estate Professionals

• Real estate agents and brokers
• Property investors
• Property managers

Medical & Legal Professionals

• Physicians in private practice
• Attorneys with own firms
• Dentists and specialists

Tech & Creative Entrepreneurs

• App developers
• Content creators
• E-commerce business owners
• Tech startup founders

Frequently Asked Questions

Can I get a mortgage if I'm self-employed?

Yes. Self-employed borrowers have multiple mortgage options including bank statement loans (using 12-24 months of deposits), asset depletion programs (using investments to qualify), and P&L loans (using CPA-prepared financials). Wholesale brokers access these programs from 50+ specialized lenders.

Why do banks deny self-employed borrowers?

Banks use tax return income, which often underrepresents self-employed earnings due to business deductions. A business owner making $200,000 in actual income might show $80,000 on tax returns after legitimate write-offs. Banks see the $80,000; wholesale lenders can see the $200,000 in deposits.

What is a bank statement loan?

A bank statement loan uses 12-24 months of personal or business bank deposits to determine income instead of tax returns. The lender calculates income based on average monthly deposits, applying an expense factor for business accounts.

What credit score do I need for a bank statement loan?

Bank statement loan credit requirements vary by lender, typically ranging from 620-700+. Higher credit scores receive better rates. Wholesale brokers can shop across lenders with different requirements.

How much down payment do self-employed borrowers need?

Down payment requirements for self-employed programs typically range from 10-20%, depending on the loan program, credit score, and loan amount.

Get Started: Self-Employed Mortgage Solutions

If you're self-employed and have been denied by banks or told you don't qualify for the home you want, a wholesale mortgage broker can help. With access to 200+ lenders offering bank statement, asset depletion, and other self-employed programs, there's likely a solution for your situation.