YOUR MORTGAGE, EXPLAINED
Four ways a lender may evaluate income beyond a paycheck
Self employment does not automatically block a mortgage. Eric’s video introduces bank statement, 1099, asset based and rental property financing. Each evaluates a different source of repayment, and each still has documentation, credit and property requirements.
By Eric Hamilton · Published October 6, 2026
Originally uploaded July 25, 2026 · 7:02 · Watch on YouTube
Written companion added October 6, 2026. Adapted from Eric’s video captions with source checks; not a word for word transcript. The recording retains its original date.
Bank statements and 1099 income
A bank statement program may examine 12 or 24 months of deposits, then account for business expenses and eligible income. The video’s $40,000 monthly deposits with a 50% expense adjustment would produce $20,000 mathematically, but that adjustment is not a universal rule. A 1099 program uses contractor income documentation under its own guidelines. Ask which deposits count, what expenses are deducted and what history is required.
Assets can support an income calculation
Some programs convert eligible assets into monthly qualifying income. In the video, $840,000 divided by 84 months equals $10,000. That illustrates the method, not eligibility: accounts, valuation reductions, required reserves and the divisor depend on the program. An underwriting calculation also does not create spendable income or establish that using retirement assets fits your financial plan.
Rental property financing has a different focus
A debt service coverage ratio loan evaluates income from an investment property rather than relying on the same personal income analysis as a home you occupy. Ask how the specific program calculates rent and payment obligations. The video’s $2,400 divided by $2,000 equals 1.20, but that ratio alone does not mean approval or prove the rental will be profitable after vacancy, maintenance and other expenses.
Compare conventional financing too
Conventional self employed underwriting is more detailed than reading one taxable income line. Fannie Mae permits certain income adjustments, including eligible depreciation adjustments. Before choosing an alternative program, compare the conventional calculation with the proposed alternative and request the complete rate, fees, down payment, reserves and any prepayment terms. The recording’s market rate and program percentages are historical examples, not current offers.
Do alternative income programs mean no financial review?
No. A different income method still requires documentation and underwriting. Ask for the requirements of the actual proposed program.
Can I use a rental DSCR loan for the home I live in?
The investment property approach discussed here is for rentals. Tell the lender how you will actually use the property.
Sources and scope
These are different documentation approaches, not one uniform loan program. Availability and eligibility vary by lender, investor, location and property use.
- Rate: Bank statement home loans Accessed October 6, 2026
- Rate: Self employed 1099 home loans Accessed October 6, 2026
- Rate: DSCR home loans Accessed October 6, 2026
- NASB: Asset depletion methodology and program requirements Accessed October 6, 2026
- Fannie Mae: Analyzing profit and loss statements Accessed October 6, 2026
General education, not a loan quote, approval or an individual recommendation. Ask the appropriate professional about your situation.
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