Buying a home in Texas as a self-employed worker or gig worker? There’s no W-2 to show a steady paycheck, and banks love predictable income.mortgage options for self-employed Texans So, how do you get approved for a mortgage?
You’re not alone. Many Texans working for themselves feel stuck, thinking they won’t qualify for a home loan. The good news? It’s completely possible.
Can You Get a Mortgage as a Self-Employed or Gig Worker?
Yes. Lenders just want proof that you can pay them back. When you don’t have a traditional salary, they look for other ways to confirm that.
Instead of W-2s, banks and lenders check things like:
- Profit & loss statements – Shows how much your business makes
- Tax returns – Proves your income over the past two years
- Bank statements – Shows consistent deposits
- Credit score – The higher, the better
- Debt-to-income ratio (DTI) – Lenders want to see how much debt you’re carrying compared to your income
If you can prove stable income and a strong financial track record, you have options.
Best Mortgage Options for Self-Employed Texans
The traditional route doesn’t always work for self-employed folks. But there are mortgage programs that fit how you make money.
1. Bank Statement Loans
You skip tax returns entirely. Instead, lenders review 12-24 months of bank statements to assess your real income.
Best for: Business owners, freelancers, and gig workers with lots of write-offs.
2. Stated Income Loans
Lenders use your stated income rather than tax documents. These have higher interest rates but fewer documentation headaches.
Best for: Applicants who make enough but don’t show much taxable net income.
3. DSCR Loans (Debt-Service Coverage Ratio)
If you’re buying an investment property, this loan looks at how much rental income the home will generate—your personal income isn’t a big factor.
Best for: Texas real estate investors who want to scale without personal income proof.
4. Conventional Loans
You can still qualify for a conventional loan if you have at least two years of tax filings that show steady income.
Best for: Self-employed borrowers with clean tax returns, solid credit, and a low DTI.
Not sure which mortgage is best for you? Check out our other real estate guides for more insights.
How to Increase Your Chances of Approval
Self-employed borrowers need a little more preparation. Here’s what really moves the needle:
1. Strengthen Your Credit Score
Lenders want borrowers with strong credit. Aim for 700+, but you can qualify with less.
Here’s how to boost your score:
- Pay off high-interest debt
- Don’t apply for new credit before house hunting
- Make on-time payments on everything
2. Lower Your Debt-to-Income Ratio (DTI)
Your DTI measures how much of your income goes toward current debts (credit cards, car loans, personal loans).
Lenders prefer a DTI below 43%. Lower = better.
How to lower it?
- Pay off any outstanding credit card balances
- Hold off on taking new loans until after you close on the house
- Increase your income (side income counts!)
3. Save Up a Larger Down Payment
If lenders see a big down payment, they feel more confident lending to you.
Aim for at least 20%, but some loans let you in with only 10% down.
4. Keep Clean Business & Personal Finances
Mixing business and personal finances is a red flag for lenders.
Keep separate accounts, track major expenses, and ensure your bookkeeping is spotless.
5. Work with a Mortgage Broker Who Understands Self-Employed Borrowers
A broker who specializes in self-employment mortgages knows which lenders are self-employed-friendly, saving you a ton of time (and stress).
FAQs
Can I get a home loan without tax returns?
Yes. Bank statement loans don’t require tax returns, just your bank deposits over the last 12-24 months.
What credit score do I need to buy a house in Texas?
For conventional loans, lenders prefer 620 and above. For better rates, a score above 700 helps.
Do freelancers qualify for a mortgage?
Absolutely. As long as you can show steady income via tax returns, bank statements, or profit & loss statements, you’re good.
How much do self-employed buyers need for a down payment?
It depends on the loan type. Some options require as little as 10%, but 20%+ improves your approval chances.
Conclusion
Buying a home in Texas as a self-employed worker or gig worker doesn’t have to be difficult. You just need to prove income in a way lenders understand. If you’re serious about getting approved, get your finances in order and work with the right lender. Check out more expert insights on ReAlpha’s blog to sharpen your home-buying strategy.