How to Get a Mortgage in Houston When You're Self-Employed

You run a successful business. Your bank account looks great. But when you apply for a mortgage, the lender looks at your tax returns and says you don't make enough money.

Sound familiar?

If you're self-employed in Houston — whether you own a nail salon, restaurant, trucking company, or any other business — you know the frustration. You write off expenses to save on taxes, but those same write-offs destroy your "qualifying income" for a mortgage.

Here's the good news: you don't have to use tax returns to get a mortgage.

The Self-Employed Mortgage Problem

Traditional mortgage lenders look at your tax returns and calculate your income like this:

• Gross Revenue: $250,000
• Business Expenses/Write-offs: -$180,000
• Net Income (what lender sees): $70,000

But your actual cash flow? Way higher. You're depositing $15-20k/month into your account. You live comfortably. You can easily afford a mortgage.

The tax return doesn't tell the real story.

The Solution: Bank Statement Loans

Bank statement loans use your actual bank deposits to calculate income — not your tax returns.

How It Works:

1. Provide 12-24 months of bank statements
2. Lender calculates average monthly deposits
3. Apply an "expense factor" (typically 50% for most businesses)
4. That's your qualifying income

Bank Statement Loan Requirements

Here's what you typically need:

Requirement	Typical Range
Credit Score	620-680 minimum
Down Payment	10-20%
Reserves	6-12 months payments
Time in Business	2+ years
Bank Statements	12 or 24 months

Documentation Needed:

• 12 or 24 months personal OR business bank statements
• Business license or proof of self-employment
• CPA letter (sometimes)
• Standard docs: ID, insurance, etc.

Who Bank Statement Loans Are Perfect For

Nail Salon / Spa Owners

High cash flow, lots of write-offs. Your deposits tell a much better story than your Schedule C.

Restaurant Owners

Same deal — significant revenue, heavy expenses on paper.

Real Estate Agents / Brokers

Commission income varies month to month. Bank statements show the full picture.

Trucking / Transportation

Owner-operators with equipment write-offs that crush tax return income.

Contractors / Construction

Project-based income that's hard to document traditionally.

E-commerce / Online Business

Digital entrepreneurs with business accounts showing strong deposits.

Medical / Dental Practice Owners

High earners with significant practice expenses.

Bank Statement Loan Rates

Let's be real: bank statement loans have higher rates than conventional mortgages. Typically 1-2% higher.

Why? More risk for the lender. No tax returns means no IRS verification.

Is it worth it? For most self-employed buyers, absolutely. The alternative is:

• Waiting 2+ years to show better tax returns
• Putting down 30-40% to qualify conventionally
• Not buying at all

A slightly higher rate beats renting or missing out on Houston's market.

Pro tip: Many clients refinance into a conventional loan after 1-2 years once they can show the income needed.

Common Mistakes Self-Employed Borrowers Make

1. Mixing Personal and Business Funds

Lenders want to see clean, consistent deposits. If you're constantly transferring between accounts, it creates confusion and can hurt your application.

2. Large Cash Deposits

Cash deposits over $1,000-2,000 are often excluded from calculations. If your business is cash-heavy, this can hurt you.

3. Applying With a Tax Return Lender

Most big banks (Chase, Wells Fargo, etc.) don't offer bank statement loans. You need a broker or non-QM lender.

4. Not Enough Reserves

Bank statement loans typically require 6-12 months of mortgage payments in reserves (savings after closing). Plan for this.

How to Prepare for a Bank Statement Loan

6 months before applying:

• Stop mixing personal/business accounts
• Deposit consistently (avoid huge spikes and drops)
• Build up reserves
• Check your credit and fix any issues

When applying:

• Gather 24 months of statements (more options than 12)
• Get CPA letter ready if needed
• Be prepared to explain any large or unusual deposits

Real Houston Example

Vietnamese Business Owners

Đặc biệt cho chủ tiệm nail, nhà hàng, và business Việt Nam:

Tôi hiểu cách business của bạn hoạt động. Nhiều thu nhập tiền mặt, nhiều chi phí write-off. Tax return không phản ánh thực tế.

Bank statement loan là giải pháp. Tôi giải thích quy trình bằng tiếng Việt và giúp bạn chuẩn bị hồ sơ đúng cách.

Is a Bank Statement Loan Right for You?

Good fit if:

• Self-employed 2+ years
• Strong bank deposits
• Tax returns don't show your real income
• 10-20% down payment available
• 620+ credit score

Not ideal if:

• W-2 employee (use conventional instead)
• Less than 2 years self-employed
• Irregular/inconsistent deposits
• Need 100% financing

Let's Look at Your Situation

Every self-employed borrower is different. I'll review your bank statements for free and tell you:

1. What you qualify for with bank statements
2. What you'd qualify for with tax returns
3. Which loan makes more sense for your situation

No obligation. Just real answers.