Self Employed and W-2 Income. What Is the Best Mortgage Path?
This is one of the most common questions I get, and it is also how my own household income is structured. I work with dozens of clients every year who are in this exact situation.
One spouse files Schedule C as self employed. The other earns W-2 income. The goal is the same for everyone. Get approved in the most strategic way possible without overpaying or limiting your options.
The right solution depends on how long the self employed income has been in place and how you want to structure the purchase.
If the Self Employed Income Is Two Years or More
If your spouse has been self employed for at least two years, lenders can usually use an average of their tax returns when qualifying.
This works well when income is consistent and not overly reduced by deductions. In many cases, this allows you to qualify for conventional financing with competitive rates and terms.
Banks, credit unions, and mortgage lenders can all be viable options in this scenario, depending on how conservative the underwriting is.
If the Self Employed Income Is Less Than Two Years
If the self employed income is newer, or if taxable income is lower due to write offs, a bank statement loan can be an option.
These loans qualify borrowers based on deposits rather than tax returns, which can help in certain situations. The trade off is that interest rates and fees are higher than traditional loans.
Bank statement loans are not automatically the best route, but they can be a useful tool when used intentionally and with full understanding of the costs.
Another Option. Qualifying Under W-2 Income Only
In some households, it may make sense to qualify for the home using only the W-2 income.
If that income alone supports the purchase, the self employed spouse may be able to gift down payment funds and stay off the loan entirely. This can simplify approval and open the door to more favorable loan terms.
This is a strategy that requires careful coordination with a lender to ensure everything is documented correctly.
Banks, Credit Unions, and Mortgage Lenders
Credit unions often offer very competitive rates, which can be appealing. However, they are sometimes less flexible when it comes to looking at all the angles available for mixed income households.
Mortgage lenders and brokers tend to be more strategic in these situations because they can evaluate multiple loan programs and underwriting approaches.
The key is working with someone who will take the time to review your full financial picture and not just run your numbers through a single formula.
Our Vetted Lender Network
We maintain a list of lenders with varying programs, including traditional financing, portfolio loans, and nonconforming options. Every lender we recommend has been fully vetted and has a track record of positive client experiences.
This allows our clients to shop intelligently, compare strategies, and choose the lender they feel most comfortable working with. The best fit is not always about the lowest rate. It is about clarity, communication, and confidence.
Work With Saira Bruno
If you find yourself asking these types of questions, this is exactly the stage where I work with clients most closely.
I host an initial Zoom consult whether this is your first home purchase or your fiftieth. The goal is to get you fully familiar with your specific search strategy, how the buying process works in North Carolina, and the current market data environment in the areas you are considering.
This conversation helps set expectations early, align financing with strategy, and remove unnecessary stress before you ever write an offer.
For more information about working together, you can visit the SB Real Estate About Us page or schedule a consult here.
Our Commitment to Integrity and Transparency
We believe this part matters.
We legally cannot accept kickbacks or referral fees from lenders, banks, credit unions, or service providers. If we recommend a lender, a carpet cleaner, a painter, or anyone else in the home buying process, it is simply because past clients have had quality experiences and we want the same for future clients.
We will always operate with full transparency, education, and support, every step of the way.
