My tax returns show less than I earn
Bank statements and self-employed income
Review eligible deposits, expenses, ownership and business history.
Explore bank statement loans →Texas mortgage options · Adam Styer
Mortgage Options When Your Income Doesn’t Fit the Usual Formula
Non-QM loans let Texas borrowers qualify without the standard W-2 and tax-return formula: on bank deposits, 1099s, a P&L, assets, or a rental’s income. Bank statement purchases reach 90% loan-to-value with minimum credit of 620 to 660.
Non-QM loans at a glance
- Programs
- Bank statement · 1099 · P&L · asset depletion · DSCR
- Bank statement credit
- 620 to 660 minimum
- Bank statement down payment
- From 10% on the strongest files
- 1099 expense factor
- Flat 10%
- DSCR down payment
- From 20% to 25%
- Asset depletion
- Assets ÷ 36 to 84 months
Figures reflect programs Adam currently places. Your terms depend on the full file.
What is a Non-QM mortgage?
A Non-QM mortgage does not meet the federal Qualified Mortgage criteria. Depending on the program, it may offer a different way to document income or assets. It is not a credit score category, and being self-employed does not automatically rule out conventional financing.
For covered consumer mortgages, lenders must still make a documented ability-to-repay determination. Business-purpose rental loans can be treated differently under the rules. The right comparison is the actual qualification method, costs and obligations of each available loan.
Sources: CFPB Qualified Mortgage guidance · business-purpose exemption · Fannie Mae self-employed guidance.
Which situation sounds like yours?
You don’t need to pick a loan before we talk. These guides explain the records and questions that may matter for your situation.
I’m paid through 1099s
1099 mortgage options
Compare documented earnings, required history and expense treatment.
Explore 1099 loans →My business financial statements tell a clearer story
P&L mortgage options
Check the accepted preparer, statement period and supporting records.
Explore P&L loans →I’m buying or refinancing a rental
DSCR investor financing
Review eligible rent, property costs, equity and the planned exit.
Explore DSCR loans →I have investments but limited regular income
Asset-based qualification
Identify eligible accounts, access rules, deductions and reserves.
Explore asset depletion →I want to refinance but my income is complicated
Refinancing with alternative documentation
Compare your current loan, qualification, costs and timing.
Explore refinance options →Need to understand your buying budget first? See how self-employed income affects affordability.
What will determine my options?
- Income documentation: Which records support stable qualifying income, eligible assets or rent?
- Credit and debt: What does your payment history look like, and which obligations must be counted?
- Down payment or equity: How much financing is needed relative to the accepted property value?
- Reserves: What eligible funds remain after closing and other required deductions?
- Property and loan size: Is this your home, a second home or a rental, and does the property fit the program?
- Timing and exit: When do you need to close, and how long do you expect to keep the loan?
These factors interact. A quoted credit minimum or loan limit is only useful when the property, documentation and transaction also fit the current program. Look up mortgage terms or send the basic scenario.
Questions to answer before choosing a loan
They work together with the loan amount, property use, income documentation and reserves. A larger down payment may open options, but it does not override every credit or property requirement. There is no single minimum for all Non-QM loans.
For a refinance, available equity takes the place of a purchase down payment. Tell me your approximate figures, and I’ll compare the relevant program paths and current requirements.
The document list follows the qualification path. Some programs use tax returns; eligible alternatives may use bank statements, 1099 earnings, a prepared P&L or assets. A rental-property review may focus on eligible rent. Supporting documents and underwriting are still required.
Start with the self-employed document comparison. A statement lookback is different from the required time in business.
Compare written quotes for the same property, loan amount, term and date. Include points or credits, closing costs, any mortgage insurance, required cash and reserves, and any prepayment charge. Also check whether the payment can change or whether a balloon payment is due.
A lower monthly payment can come with a longer repayment period or greater total cost. Use the mortgage-offer comparison guide to keep the tradeoffs visible.
You would need to meet the new loan’s income, credit, equity, property and other requirements at that time. Better documented earnings, a different debt picture or more equity may help, but a future refinance is not guaranteed.
Compare the new costs and remaining loan term with keeping your current mortgage. For a rental loan, include any prepayment charge; a stronger DSCR alone does not establish conventional eligibility. See what a future refinance review involves.
A DSCR loan may include a prepayment charge. The loan documents determine when it applies, how long it lasts, and the amount used to calculate it. Ask how a sale, refinance or partial principal payment is treated before choosing the loan.
Compare any available penalty and no-penalty options using your expected holding period and written quotes. See the DSCR prepayment example and questions to ask.
I review your goal, income situation and timing, then discuss which documentation path is worth checking. If you move forward, we gather the appropriate records securely, compare the supported options, and complete the application and underwriting steps.
Missing records, deposit explanations, appraisal, title, insurance and lender conditions can affect timing. Share your contract deadline early. See the review process and send your scenario.
Let’s look at your situation
I’ll look at how you earn, what you want to buy or refinance, and the funds available. We can compare standard and alternative-documentation paths without assuming one is best before reviewing the file.
Finding a Non-QM lender
★★★★★
“He and his team did a great job of finding the right non-QM lender, navigating the underwriting process, and closing on time.”
Already have a specific question? Explore LLC investment financing, high-net-worth strategies, K-1 income, jumbo financing, or shorter self-employment histories.
Adam Styer · NMLS #513013 · Austin and throughout Texas. Educational information; eligibility and terms depend on the borrower, property and current program.
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