Can You Get a Mortgage with Only 1 Tax Return?

It’s widely believed that you must have 2 years of tax returns in order to get a mortgage.  While this is certainly the case with the majority of mortgage lenders, there are many others who will lend to a qualifying borrower with only 1 tax return (for the most recent year).  We also work closely with many mortgage companies who do not require any tax returns, and let you use your bank statements to qualify for a mortgage.

Using only 1 year of tax returns is helpful for many, especially those who are newly self-employed.  In order to be eligible with most lenders to only use one year of self employment income, is if you previously worked in the same industry and in a similar field.  If you previously were employed in a different line of work, this may disqualify you from a 1 year tax return mortgage.  It is also important that your income is either around the same, or higher than it was before becoming self-employed.  Mortgage lenders will be looking at the stability of your income, and the likelihood of it will either continue or increase with time.

Top 1 Year Tax Return Mortgage Lenders of 2019

Below are some of the best mortgage lenders for newly self employed mortgage applicants.  We would be glad to help you find a mortgage lender that will allow you to use only your most recent year of income.  If you fill out our contact form requesting more information, we will help match you narrow down your search to see who may  offer you the best option based on your location, and personal situation.

1 – Northstar Funding

2 – Impac Mortgage

3 – Citadel Servicing

4 – New American Funding

5 – Hurst Lending

The above examples are a small sample of mortgage companies that offer options to qualify for a home loan with only 1 tax return.  Contact us to learn what lenders in your state offer these programs.

Frequently Asked Questions

Must I use a particular type of mortgage lender for this loan program?
Yes, many mortgage companies will only have options that will require you to use 2 years of tax returns. You need to either use a portfolio lender, or a mortgage company that uses the Freddie Mac automated underwriting system (Loan Prospector), that often will approve an applicant to only use their most recent year of income (1 tax return).  Keep in mind, the underwriting software that Fannie Mae uses is much less likely to provide a loan approval requiring only 1 tax return.

What is the highest DTI ratio allowed?
You should expect most lenders to require your DTI ratio to be no greater than 43%. However, some portfolio lenders, and other private mortgage lenders, may allow up to a 50% DTI.

Can you get a FHA loan using only 1 year of income?
No, the FHA guidelines require that you use your 2 most recent years of tax returns.

Are there any refinance programs that allow you to use only 1 year of income?
Yes, there are refinancing options that allow you qualify with only 1 tax return. This includes both rate and term refinancing, as well as cash out refinancing.

Can you be a first time home buyer and qualify for a 1 year tax return mortgage?
Yes, you may be a first time home buyer. The possibility of qualifying for a mortgage using only 1 year of income is not limited to repeat home buyers.

What are the guidelines related to co-borrowers?
You may use a co-borrower for your mortgage. They will need to meet the qualifications of the mortgage lender you apply with, but it should not be an issue to have a co-borrower (including a non-occupant co-borrower).