Getting a Mortgage When You Are Self-Employed in Michigan

Tax returns tell only part of the story

Traditional mortgage underwriting often relies on tax-return income after allowable adjustments. Business write-offs that reduce taxable income can also reduce qualifying income.

That is why a successful business owner can look weaker on paper than the actual cash flow suggests.

Document the business early

Depending on the program, lenders may review tax returns, year-to-date profit and loss information, balance sheets, business bank statements or other documentation.

Starting early gives time to identify unusual deposits, declining revenue, one-time expenses or ownership questions before they become underwriting problems.

Alternative-documentation programs may exist

Some non-QM programs may evaluate self-employed income using bank statements or other alternative methods rather than traditional tax-return calculations, subject to lender and program requirements.

These programs can create another path, but pricing, reserves, down payment and documentation standards may differ from agency financing.

Do not assume the first 'no' is universal

A self-employed denial may come from an income-calculation issue, lender overlay or documentation mismatch. A second opinion can be worthwhile when the underlying business is sound.

Related Michigan mortgage resources

• Self-employed mortgage options
• Bank statement loans
• Mortgage denied second opinion
• Start my pre-approval