A self-employed borrower is anyone whose primary income comes from running their own business, freelancing, or working as an independent contractor rather than earning a steady paycheck from an employer. This includes sole proprietors, business owners, gig workers, and consultants who manage their own earnings and taxes. Unlike traditional employees who receive W-2s, self-employed individuals typically report income through tax returns, profit-and-loss statements, and bank records, which lenders use to assess financial stability.
Needing a mortgage as a self-employed borrower can arise in various situations. You might be purchasing your first home, upgrading to a larger space, or refinancing an existing loan for better terms. Some borrowers may also need a mortgage after recently transitioning to self-employment and finding that their income documentation differs from traditional requirements. Whether you’re a freelancer looking for a primary residence or a business owner investing in property, understanding how lenders assess self-employment income can help you navigate the mortgage process successfully.
