---
title: How Do You Get A Loan Modification When You're Self-Employed?
description: Self-employed people earn a higher income on average than people who receive a regular paycheck, but they can have a harder time getting approved for a mortgage or a loan modification. Some lawyers might tell you that you can't get a loan modification if you're self-employed. Not true. You can.
---

[Foreclosure and Loan Modification Blog](https://blog.amerihopealliance.com/blog)

# [How Do You Get A Loan Modification When You're Self-Employed?](https://blog.amerihopealliance.com/blog/how-do-you-get-a-loan-modification-when-youre-self-employed)

 Written by [Maxwell Swinney](https://blog.amerihopealliance.com/blog/author/maxwell-swinney) | Thursday, January 10, 2019

**Self-employed people** earn a higher income on average than people who receive a regular paycheck, but they can have a harder time getting approved for a mortgage. They can also find it **more difficult to get approved for a loan modification** if they fall behind on their mortgage.

Some lawyers might tell you that you can't get a loan modification if you're self-employed. That's just not true. **You can.** However, it will most likely add more work to a process that already takes a lot of work.

The reason getting and modifying a mortgage is more difficult for self-employed people is that their **income varies** more than salaried and hourly workers and **they don't have the pay stubs or W-2s** that make it easy for banks to verify earnings.

## Applying For A Loan Modification

**Getting a loan modification is hard enough** when you have a salary that pays you the exact same amount every two weeks. To apply, you have to submit a thorough [application](https://blog.amerihopealliance.com/blog/what-is-a-request-for-mortgage-assistance-rma) that includes **documentation of all of your finances**, including your tax returns, bank statements, and pay stubs. After all of this work, their application is often [denied](https://blog.amerihopealliance.com/blog/bid/278385/Why-is-my-loan-modification-denied).

**Self-employed entrepreneurs don't typically have pay stubs.** And their business and personal finances are often sloppily intertwined.

Another problem is that **self-employed people often write off as many expenses as they can or even do cash business off the books in order to pay the minimal amount of taxes**. Making it seem like you don't make very much money is an effective strategy for avoiding taxes, but not for getting a loan modification. You may need to change these habits to qualify for a [loan modification](https://blog.amerihopealliance.com/blog/spot-the-differences-loan-modification-vs-short-sale).

## Verifying Your Income

For your lender to approve you for a loan modification, they need to be convinced that you have **enough income to pay your mortgage** every month. After all, if you're [in default](https://blog.amerihopealliance.com/blog/defaults-of-the-rich-and-famous-celebs-who-needed-foreclosure-help), it means that you failed to do that at some point. So, with the issues they have, how do self-employed homeowners prove that they have enough income to deserve a loan modification?

- **Make regular deposits into your personal bank account.** You have to take the money earned from your business and deposit it into your personal bank account on a consistent basis. That's what's used as if it was your pay stub.
- **File business and personal tax returns.** All homeowners applying for a loan modification have to show completed tax returns. If you own a business, the business' taxes must be filed as well. It's mainly the bank deposits and tax returns that a lender will use to verify a homeowner's income.
- **Complete a profit and loss statement.** This is required of self-employed homeowners trying to get a loan modification. It can be hard to complete.

 It's a good idea for anyone who's trying to get a loan modification to [have a qualified attorney help them](https://blog.amerihopealliance.com/blog/how-to-work-with-a-foreclosure-defense-attorney) apply. An experienced lawyer will have an understanding of **what the bank needs to see to approve an application**. It's even more important for homeowners who are self-employed to have an attorney when trying to get a loan modification because it takes more work.

**Our firm has helped many self-employed homeowners get a loan modification.** We help them complete profit and loss statements and do everything possible to make the process as easy as possible on them and put the odds of success in their favor.

 

 

[View full post](https://blog.amerihopealliance.com/blog/how-do-you-get-a-loan-modification-when-youre-self-employed)

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