Maybe you run drive for Uber on weekends, freelance in graphic design, or manage multiple income streams that don’t fit the “traditional” mold. Welcome to the new normal. At the Potempa Team, we know that just because all of your income isn’t coming from a W-2 doesn’t mean you’re not ready—or qualified—to buy a home.
However, when it comes to getting approved for a mortgage, non-traditional income can sometimes feel like a roadblock. The good news? It’s possible to buy a home when your side hustle pays the bill—you just need the right strategy (and the right team) in your corner.
Step One: Get Your Financial House in Order
When your income doesn’t come in a neat little paycheck every two weeks, things can get messy fast—especially if you’re mixing personal expenses with your business funds. That’s why keeping your finances organized isn’t just smart for tax season, it’s essential for mortgage pre-approval.
The first tip? Separate your accounts. If you haven’t already, set up a dedicated bank account for your side hustle. Not only does this make tracking income and expenses easier, it also provides your lender with a clear view of what your business is generating (and what’s being spent).
Second, be mindful of deductions. Yes, writing off business expenses helps lower your tax bill, but it also reduces your reported income, which your lender will consider during the pre-approval process.
Step Two: Showing the Receipts and Proving Your Income
Lenders like to see income that’s consistent, verifiable, and likely to continue. Before starting the pre-approval process, gather documents that show at least two years of income history from your non-traditional source, along with documents related to a more traditional source (if applicable). That usually means two years of tax returns, ideally showing increasing or stable income. If your income dipped in one year or if you’ve only been self-employed for a shorter time, don’t worry—you just might need to provide additional documentation to strengthen your file.
Think:
- 1099s or invoices from clients
- Year-to-date profit and loss statements
- Business bank account statements
- Airbnb earnings sheets
- A letter from your CPA (if applicable)
The more clearly you can show that your income is real and reliable, the better your chances of getting approved for the loan you want.
Step Three: Start the Pre-Approval Process Early
When you’re earning non-traditional income and paying the bills with a side hustle, timing is everything when it comes to getting pre-approved. The earlier you start the process, the smoother your path to homeownership will be. Prospective home buyers with a side hustle or self-employed income often need to provide additional documentation upfront, such as tax returns, profit and loss statements, or business bank statements.
At the Potempa Team, we’re here to guide you through the pre-approval process step by step so nothing gets missed, and you’re not scrambling when you find the home you love. Be sure to check out the comprehensive guide we’ve put together here and bookmark it for future reference as you move forward with your purchase.
Step Four: Your Lender Will Make All the Difference
If your income doesn’t fit the “traditional” mold, you need a mortgage team that knows how to work outside the box. The truth is, not every lender understands how to handle non-W-2 income, which can make the process more complicated and stressful than it needs to be.
We’ve helped countless buyers, from freelancers to entrepreneurs and gig workers, secure financing with confidence. We know what underwriters are looking for, how to present your income in the best possible light, and what loan options might be a fit based on your unique financial situation.
Purchasing a home is a significant decision, regardless of how you earn your money. With the right guidance, you absolutely can buy a home when your side hustle pays the bills—and we’re here to help you make it happen. Get started on the pre-approval process now with the Potempa Team!
