Nick Nagy Structures Mortgages for Self-Employed California Borrowers

The standard tax-return route

A standard file documents income through tax returns and business records. This route often works best for a self-employed borrower whose reported income already supports the loan amount they need.

A borrower whose tax returns show heavy write-offs may show less qualifying income on paper than they actually take home.

This route usually produces the widest set of loan program options, which is why it is worth checking first even when it does not look like the obvious fit.

The asset-based route

An asset-based, or asset-depletion, approach qualifies a borrower using verified assets instead of income documents. This can fit a borrower with significant savings or investments but inconsistent reported income.

This route fits a retiree or a business owner between contracts more often than someone earning a steady, predictable income.

Documentation for this route centers on statements proving the assets exist and are accessible, rather than pay stubs or tax returns.

What documentation to have ready

Different routes need different documents, so having options ready upfront speeds up the comparison.

Gathering documents for more than one route at the start means a switch between programs does not cost extra time later in the process.

• Multiple years of tax returns, if going the standard route
• Recent bank statements, business and personal
• A current profit and loss statement
• Asset statements, if considering an asset-based file

The mistakes, and none of them is the buyer

• Assuming self-employed income can only be shown through tax returns.
• Giving up after one lender’s overlay declines a self-employed file.
• Not having recent bank statements ready before starting the comparison.
• Choosing a documentation route before comparing it against the alternatives.