How to Buy a Home When You’re Self-Employed: Financing Tips for 2025 Buyers

Hanson Capital Homes | Chattanooga Valley & Beyond

🧑‍💻 Introduction: You’re the Boss—But Is the Bank on Board?

Being self-employed is empowering—you control your schedule, your income, and your vision. But when it comes to buying a home in 2025, lenders may see you differently than a W-2 employee.

Cue the paperwork, the extra scrutiny, and questions like:

"Can I even get approved without a traditional salary?"
"Do I need two years of tax returns?"
"Will my write-offs hurt me?"

If this sounds familiar, you're not alone. In fact, over 16 million Americans are self-employed, and many of them are looking to buy homes in places like Chattanooga Valley, Ringgold, and Ooltewah—where lifestyle meets opportunity.

At Hanson Capital Homes, we specialize in helping entrepreneurs, freelancers, and 1099 earners navigate the home-buying process with confidence.

Let’s break it all down—without the fluff.

💼 Featured Snippet: Can You Get a Mortgage If You’re Self-Employed?

Yes! Self-employed buyers can absolutely get mortgages in 2025—but lenders require more documentation, consistent income history (usually 2 years), and lower debt-to-income ratios.

🛠️ Step-by-Step: How to Buy a Home When You’re Self-Employed

1. 📂 Gather Your Financial Paperwork Early

Self-employed buyers should prepare:

• 2 years of personal and business tax returns (with all schedules)

• Profit & Loss statements (P&L)—year-to-date

• Bank statements (business and personal)

• List of debts & monthly expenses

• Business license, 1099s, or proof of ownership

🎯 Hanson Tip: Keep personal and business expenses in separate bank accounts to simplify underwriting.

2. 🏦 Choose the Right Lender (Not Just the Cheapest)

Some lenders love working with self-employed clients. Others… not so much.

Look for lenders who offer:

• Bank Statement Loans (based on deposits, not tax returns)

• Non-QM Loans (non-qualified mortgages with flexible documentation)

• 1099-Only Loans

• Traditional FHA, VA, or Conventional options (if income is stable)

🧠 Pro Insight: Local lenders in Chattanooga Valley or North Georgia often better understand regional business types (e.g., contractors, agents, small business owners).

3. 💸 Understand How Write-Offs Affect Your Loan Amount

You may show $150,000 in gross income…
But after deductions, your taxable income is only $45,000. That’s what most lenders use.

📉 Write-offs = lower taxable income = lower loan approval amount

That’s great at tax time—but not for getting a mortgage.

🎯 Hanson Tip: Work with a CPA who understands your homebuying goals. In some cases, it may make sense to reduce deductions for 1–2 years to show more qualifying income.

4. 📊 Know Your Debt-to-Income Ratio (DTI)

Your DTI = total monthly debts ÷ gross monthly income.

Most lenders want a DTI under 43% for conventional loans. FHA may go up to 50%.

Include:

• Car payments

• Credit cards

• Student loans

• Estimated mortgage payment

• Any business loan obligations

🤓 Example: If your monthly debts = $2,500 and your gross income = $6,000/month, your DTI is 41.6% — likely acceptable.

5. ✅ Get Pre-Approved, Not Just Pre-Qualified

Pre-approval means the lender verifies your documents and credit—not just guesses based on your word.

💡 Sellers in Chattanooga, Fort Oglethorpe, and Ringgold markets take pre-approved offers more seriously, especially in 2025’s fast-moving market.

📍 Local Insight: Where Self-Employed Buyers Are Moving

• Ooltewah & Apison: Great for remote workers and entrepreneurs wanting space

• Chattanooga Valley & Lookout Mountain: Popular for creatives, tech freelancers, and those who want scenic views and low property taxes

• North Georgia (Ringgold, Dalton): Affordable housing + growing business opportunities

🏠 Many self-employed buyers are also exploring multi-use homes (with offices, studios, or rental units).

🧠 Myth vs. Reality: Self-Employed Buyer Edition

MythReality“I need perfect credit to buy.”Not true. FHA loans allow for lower scores (580+).“I can't qualify with 1099 income.”You can—if you show consistent earnings over 1–2 years.“Write-offs help my buying power.”Actually, they reduce your qualifying income for a loan.“Only banks offer loans.”Mortgage brokers and credit unions may offer better options.

📦 Bonus Tips: What Not to Do Before Closing

❌ Don’t switch banks
❌ Don’t make large undocumented deposits
❌ Don’t take out a new car loan
❌ Don’t file your taxes late (especially if you’re mid-approval)
❌ Don’t co-sign a loan “just to help out”

⚠️ Even one of these could delay—or kill—your approval.

✅ Conclusion: Your Income Is Flexible—Your Plan Should Be Too

Being self-employed doesn't mean you can't buy a home. It just means you need a smart strategy, the right team, and a little more documentation.

At Hanson Capital Homes, we’ve helped countless entrepreneurs, freelancers, and small business owners turn “I don’t think I can” into “Welcome home.”

🎯 Ready to start planning your purchase—even if you're not quite ready to apply? Click here!