Mortgages More Difficult to Obtain for the Self-Employed

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Americans who are self-employed have to meet higher mortgage requirements when applying for a home loan. This is revealed in a new research report by the online real estate database Zillow.
Zillow found that self-employed individuals receive nearly two times fewer mortgage quotes compared to prospect borrowers who do not fall into this category. While the non-self-employed obtain 10 quotes on average, the self-employed get around 6.

Lenders are more wary of self-employed mortgage applicants despite the fact that they have much higher average income compared to those who do not fall into this category. For the self-employed, the average reported income per household is $145,000 per year. For those who are not in this category, the average self-reported household income is $80,000.
The Zillow report revealed that the self-employed make mortgage applications for the purchase of more expensive properties. The median property value for home loan requests which they make via the database’s online platform is $352,000. For comparison, the median property value for mortgage requests made by non-self-employed individuals is $315,000.

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The report reveals that the major hurdle in front of self-employed mortgage borrowers is their credit score. The share of self-employed borrowers with credit score, which is lower than 720, is two times greater compared to those who are not in this position. The same applies to the category of credit score lower than 680. While 48% of the self-employed have credit score below 720, only 23% of those who are not fall into this category. Some 28% of self-employed individuals have credit score lower than 680. The share of non-self-employed who have credit score below this value is 14%.

Prospect mortgage borrowers with self-employment place a slightly larger down payment compared to those who are not in this position. On average its size is 15.3% of the property value compared to 14.6% of the property value for those who are not self-employed.



Mailynne serves as a content strategist and writer for She is ahighly task-oriented strategic planner and experienced writer. Over the past 10 years, Mailynne has managedcontent for both large corporations, non-profits and businesses. She specializes in managing digital marketing,branding and web development content. Mailynne has worked with a variety of local, national and international organizations.


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