How lenders look at your income
For W-2 employees, lenders look at pay stubs. For self-employed, 1099, and seasonal workers, they look at what you reported on your tax returns, usually the last two years, and average it.
That's why timing and tax planning matter. Big write-offs lower your taxes, but they also lower the income a lender can use.
Seasonal work: fishing, tourism, construction
Seasonal income is common in Alaska and absolutely can qualify. Lenders want to see a two-year history in the same line of work and a reasonable expectation that it will continue. It's fine if you earn most of your income in a few months, as long as it's documented.
I grew up commercial fishing and working on tour boats, so I know how to present this kind of income to a lender and which lenders handle it well.
What to have ready
- Two years of personal tax returns, with all schedules.
- Two years of business returns, if you own a corporation or partnership.
- A year-to-date profit and loss statement, if it's later in the year.
- Two months of bank statements.
- 1099s, crew settlement sheets, or season contracts, if you have them.
Common hurdles and how to handle them
- Income went down last year: lenders may use the lower year, so we'll plan around it.
- Less than two years self-employed: sometimes one year works if you were in the same field before.
- Large write-offs: some deductions, like depreciation, can be added back.
- Irregular deposits: a clear paper trail of where your down payment came from avoids delays.
The earlier we talk, the more options you have. A quick review of your returns before you house hunt can save weeks later.
Common questions
Can I get a mortgage if I'm self-employed?
Yes. Lenders typically average two years of income from your personal and business tax returns. Some deductions, like depreciation, can be added back to your qualifying income.
Does seasonal income count for a mortgage?
Yes. Seasonal income from work like commercial fishing, tourism, or construction can qualify when you have a two-year history in the same line of work and it's documented on your tax returns.
How many years of tax returns do I need?
Usually two years. In some cases one year can work if you were previously in the same line of work as an employee.
Do write-offs hurt my mortgage application?
They can. Lenders use your income after most deductions, so large write-offs lower the amount you qualify for. Talk with Eric and your tax preparer before filing if you plan to buy soon.
Want to run your numbers?
Text me your situation and I'll tell you which options fit. Most people hear back within a couple of hours during business hours.
This guide is general information, not a commitment to lend. Loan programs, limits, and guidelines change, and all loans are subject to credit approval and property eligibility.