---
title: Why Mortgages are Different for Business Owners vs. Employees
description: Getting a mortgage when you own a business or are self-employed in Oklahoma is different than if you're a traditional W2 employee. Read on to learn more.
---

[The Lincoln Lending Blog](https://resources.lincolnok.com/blog)

# [Why Mortgages are Different for Business Owners vs. Employees](https://resources.lincolnok.com/blog/why-mortgages-are-different-for-business-owners-vs-employees)

 Written by [Kelly Pensoneau](https://resources.lincolnok.com/blog/author/kelly-pensoneau) | Dec 17, 2019, 4:10:43 PM

Did you know that the home loan qualification process is not the same for everyone? [Requirements for business owners](https://resources.lincolnok.com/buying-a-home-as-a-business-owner) in Oklahoma are different than those for individuals or couples employed by someone else. In this article, we’ll share some of the most important differences between buying a home as a business owner and a traditional W2 employee.

 

 

## W-2 Employees 

If you are the average full-time employee who fills out a W-2 form for your company, then the lender can use your gross income to qualify you for a home loan. Before you apply for a loan, you should be on your current job for a minimum of 30 days. After 30 days, your lender will be able to easily calculate your yearly gross income.  

In most cases, a W2 employee will need a two-year work history, overall, to qualify for a loan. A lender can even count bonuses and overtime if you’ve been getting them for two years and they are reasonably likely to continue.

 

If you are employed part-time, you must have a two-year history at the same employer to establish your income level.

 

## Business Owner 

If you have an ownership stake of 25% or more in a business, you must include the income from that business, whether positive or negative, in your income calculation.  

Your lender will use[net income instead of gross income](https://www.investopedia.com/ask/answers/101314/what-are-differences-between-gross-profit-and-net-income.asp) in your loan qualification. However, a business owner can also make adjustments like depreciation.

Business owners should maximize their income by claiming all income, even cash business, when planning a home purchase. Writing off debt could have tax benefits, but could negatively impact a home loan application because it reduces your net income. Buying non-essential items like a boat or motorcycle could negatively affect your debt-to-income ratio and thus, your ability to qualify for the loan you want.  

 

## Are You Ready to Buy a New Home?

Planning ahead is important because your business finances could impact your personal financial position. Your first step should be to speak with your lender about your circumstances. A lender can’t give specific financial advice, but can coach you on what to consider while planning your home purchase. 

Click below to schedule a free, on-obligation mortgage coaching session so we can help you plan for purchasing a home as a business owner.

 

 

[View full post](https://resources.lincolnok.com/blog/why-mortgages-are-different-for-business-owners-vs-employees)

```json
{
  "@context" : "http://schema.org",
  "@type" : "BlogPosting",
  "author" : {
    "@type" : "Person",
    "name" : "Kelly Pensoneau"
  },
  "dateModified" : "2021-10-18T15:14:25.677Z",
  "datePublished" : "2019-12-17T16:10:43Z",
  "headline" : "Why Mortgages are Different for Business Owners vs. Employees",
  "image" : {
    "@type" : "ImageObject",
    "height" : 1200,
    "url" : "https://cdn2.hubspot.net/hubfs/2920157/Article%20Thumbnail/Why%20Mortgages%20are%20Different%20for%20Business%20Owners%20vs%20Employees.png",
    "width" : 1200
  },
  "mainEntityOfPage" : "https://resources.lincolnok.com/blog/why-mortgages-are-different-for-business-owners-vs-employees",
  "publisher" : {
    "@type" : "Organization",
    "logo" : {
      "@type" : "ImageObject",
      "height" : 60,
      "url" : "/hs/hsstatic/content_shared_assets/static-1.4092/img/default-amp-logo.png",
      "width" : 60
    },
    "name" : "The Lincoln Lending Blog"
  }
}
```