Can Real Estate Agents Qualify for a Mortgage on Commission Income?
The short answer
Yes. Agents buy homes all the time, though they are often the last to get their own paperwork together. Most agents are 1099 independent contractors, so lenders treat them as self-employed: they usually average two years of net income from tax returns, after business expenses. Agents with big write-offs may also look at bank statement or 1099-based programs.
How lenders look at agent income
- History: two years as an agent is the usual standard. Newer agents may qualify with less in some cases, especially with prior related income.
- Net, not gross: commission splits, brokerage fees, marketing, MLS dues, mileage and other write-offs reduce qualifying income.
- Trend: a strong year after a slow one is fine. A big drop gets questions.
- Pending deals: commissions you expect to earn generally do not count until they are earned and documented.
Smart moves for agents planning to buy
- Talk to a lender before tax season, not after.
- Keep business and personal accounts separate.
- Keep your license, brokerage letter and 1099s handy.
- Avoid new car loans or big purchases on credit right before applying. You know this rule; you tell your clients this rule.
Options when tax returns do not tell the whole story
Bank statement loans and 1099-based programs can use deposits or 1099 totals with an expense factor. They are non-QM and usually cost more, but they can bridge a strong-business, low-taxable-income year.
Frequently asked questions
Can I represent myself on the purchase?
That is between you and your broker, and it may require disclosure. It does not change how a lender counts your income.
What if I am a W-2 agent or team member on salary plus commission?
Lenders often average commission over a period, typically two years. Ask us how your pay structure is treated.
Read how lenders calculate self-employed income, call (469) 414-5554, or visit our Texas branch. Agents, we love working with you and your buyers, too.
By Kelly Welton, Mortgage Broker (NMLS #314183), Mohave Mortgage Texas Branch. Mohave Mortgage NMLS #1830581 · Texas Branch NMLS #2690682 · Equal Housing Opportunity. General information only, not a commitment to lend or financial advice. Programs, rates and guidelines vary and change.
