Can I get a mortgage with one year of self-employment?

Sometimes. Conventional guidelines prefer two years, but one year can work with prior W-2 history in the same field. Several bank statement programs also accept 12 months of deposits. Don't self-reject — the right program depends on your specific history.

Do bank statement loans cost more?

Typically 0.5–1.5% above conventional rates, depending on credit and down payment. Many borrowers use one to buy now, then refinance into conventional once their tax returns support qualifying — a path we plan from day one.

What do lenders count as my self-employed income?

For traditional loans: your net income after write-offs, averaged over two years of tax returns (with some add-backs like depreciation). For bank statement loans: your actual deposits, averaged over 12–24 months with an expense factor applied to business accounts.

Loan Programs

Self-Employed Mortgages in Utah: How to Qualify When Your Tax Returns Work Against You

By Chad Knowles, Owner/Broker NMLS #968860 · Published June 30, 2026

Short answer: Utah lenders qualify self-employed borrowers on net income after write-offs — so aggressive deductions that save you taxes also shrink your buying power. The fixes are either planning your tax returns two years ahead of a purchase, or using a bank statement loan that qualifies you on actual deposits instead of taxable income.

Why the system feels rigged against business owners

A W-2 employee earning $120,000 qualifies on $120,000. A contractor grossing $200,000 who writes down to $70,000 taxable qualifies on… $70,000. Same real cash flow, wildly different mortgage. That’s not a lender being difficult — traditional underwriting is required to use documented taxable income.

With Utah’s large population of contractors, realtors, consultants, and small-business owners, this is one of the most common problems we solve.

Path 1: Traditional qualifying, planned ahead

If a purchase is 1–2 years out, coordinate with your CPA now:

Lenders average your last two years of net self-employment income (a strong recent year helps but gets averaged down by a weak prior one)
Some write-offs get added back — depreciation, depletion, one-time expenses, business use of home — so clean bookkeeping directly increases qualifying income
Moderating deductions for two tax cycles costs some tax but can unlock hundreds of thousands in conventional borrowing power at the cheapest rates

This is the cheapest path if you have the runway.

Path 2: Bank statement loans, for buying now

Bank statement programs skip tax returns entirely. The lender averages 12–24 months of deposits (personal or business accounts), applies an expense factor to business deposits — commonly 50%, less with a CPA letter stating your actual expense ratio — and that’s your income.

Expect: 620+ credit (680+ for better pricing), 10–20% down, and rates modestly above conventional. For a business owner whose bank deposits tell a much better story than their Schedule C, it’s the difference between buying this year and waiting two tax cycles.

The play we run most often

Buy now on a bank statement loan, keep the tax returns clean for the next two filings, then refinance into conventional pricing once traditional qualifying works. You get the house at today’s price and fix the rate premium later — we set up the refinance target on day one so it’s a plan, not a hope.

Self-employed and curious what you’d qualify for both ways? Book a free consult — bring nothing but a guess at your deposits and we’ll sketch both paths in 15 minutes.