Mortgage Options for Self-Employed Borrowers in Idaho

Your Bank Account May Tell a Different Story Than Your Tax Return

Owning a business can be fantastic until you apply for a mortgage and discover that the tax deductions you love may reduce the income available for traditional mortgage qualification.

For self-employed homebuyers in Idaho Falls, Blackfoot, Pocatello, and communities across East Idaho, this can create some confusion when it’s time to apply for a home loan.

That’s because conventional mortgage programs generally evaluate self-employed income using tax returns and specific underwriting calculations.

But the conversation doesn’t necessarily end there.

Some Idaho business owners and self-employed borrowers may have access to alternative mortgage programs that evaluate business or personal bank deposits rather than qualifying solely from traditional tax-return income.

These are commonly called bank-statement loans.

Depending on the program, a lender may review 12 or 24 months of bank statements and analyze eligible deposits to determine qualifying income. Business expenses and an appropriate expense factor may also need to be considered.

These aren’t the solution for everyone. Rates, down-payment requirements, credit requirements, and other terms can differ from conventional financing.

But they’re an important reminder of something I tell borrowers constantly:

Not qualifying for one mortgage program does not mean you don’t qualify for a mortgage.

If you’re self-employed and looking to buy a home in Idaho, talk to a mortgage professional before assuming your tax returns have eliminated your opportunity to buy. There may be another way to document your income that better reflects how your business actually operates.