IncomeChecker.com

Self-Employed Mortgage Calculator

See what income a lender may count if you are self-employed. Enter net business income and add-backs for the last two years, and get qualifying monthly income and the housing payment it supports at your DTI limit.

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Depreciation and other non-cash expenses

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%
Qualifying monthly income
$6,708.33
Two-year average
Maximum total debt payments
$2,884.58
Maximum housing payment
$2,284.58

How qualifying income is calculated

  • Each year = net business income + add-backs (such as depreciation)
  • If income held steady or rose: average the two years ÷ 12
  • If income dropped: use the most recent year ÷ 12
  • Maximum housing payment = qualifying income × maximum DTI − other monthly debts

Example. Most recent year: $80,000 net plus $6,000 add-backs is $86,000. Prior year: $70,000 plus $5,000 is $75,000. Income rose, so the average is $80,500, or $6,708 a month. At 43% DTI with $600 of other debts, the housing payment can be up to $2,284.

Things to check

  • Lenders typically want two years of self-employment history and tax returns. Many average the two years when income is stable or growing and use the lower recent year if it declined.
  • Common add-backs are non-cash expenses such as depreciation and depletion. Cash expenses are not added back. Your lender decides what qualifies.
  • Use net business income after expenses, from your tax returns, not gross revenue. Heavy deductions that lower your tax bill also lower the income a lender can count.
  • This is an estimate of income only. Credit, assets, and the loan program decide approval.

Frequently asked questions

How do lenders count self-employed income?

Usually from two years of tax returns. They take net business income, add back certain non-cash expenses, and average the two years. If income fell, many use the lower recent figure.

Why is my qualifying income lower than what I earn?

Because lenders start from the net profit on your returns, after deductions. Write-offs reduce taxable income and the income a lender can count.

What if I have less than two years of self-employment?

Some programs allow one year with a prior history in the same field. Others, such as bank statement loans, use deposits instead of tax returns. Ask your lender about options.

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Calculators give estimates from the numbers you enter. They are not tax, legal, or accounting advice.