Buying a home in Texas when you’re self-employed can feel like solving a puzzle without the picture on the box. Whether you're a San Antonio-based hairstylist, a freelance web designer in Austin, or a yoga instructor in San Marcos, navigating the mortgage process without a traditional W‑2 can bring unexpected challenges.

The good news? Most of these issues are avoidable with the right guidance. Let’s break down the five most common mistakes self-employed buyers make when applying for a mortgage in Texas, and how you can sidestep them. 

1. Relying Too Heavily on Tax Returns

1. Relying Too Heavily on Tax Returns

The mistake:

Many self-employed buyers assume they need two years of pristine tax returns to qualify. But tax filings often underreport income due to deductions, making it harder to qualify on paper.

The fix:

Ask about bank statement loans or P&L-only options. At New Horizons Lending, we help San Antonio freelancers and small business owners use alternative documentation that shows your real income picture, not just your taxable one.

2. Not Separating Business and Personal Finances

The mistake:

Blurring the lines between business and personal accounts makes it tough for underwriters to assess your true financial health.

The fix:

Set up dedicated business accounts and keep them clean. Not only will this make applying easier, it can also open you up to better loan programs available to organized self-employed borrowers in Texas.

3. Waiting Too Long to Get Pre-Approved

The mistake:

You spot your dream home in San Antonio’s tight market, but you haven’t spoken to a lender yet. In Texas, homes move fast, and waiting on pre-approval could mean missing out.

The fix:

Start early. Even if you’re still organizing your documents or recovering from a slow season, a lender that understands self-employed home loans in Texas can guide you through what to prepare before you start house hunting.

4. Assuming You Can’t Qualify

The mistake:

We hear it all the time: “I’m a freelancer, I probably don’t qualify.” Many Texas buyers disqualify themselves before they’ve even applied.

The fix:

Don’t self-reject. There are more self-employed mortgage options in Texas now than ever before, including 1099-only loans, asset-based loans, and low-doc programs. The key is working with a mortgage broker who knows how to match the right program to your unique income story.

5. Choosing the Wrong Lender

The mistake:

Big banks often apply rigid standards built for salaried employees. That can mean more paperwork, more headaches, and a higher chance of denial for self-employed buyers.

The fix:

Work with a lender who specializes inTexas self-employed home loans. At New Horizons Lending, we serve buyers across San Antonio, Helotes, Austin, and surrounding areas. We understand how to navigate the complexities of 1099s, bank statements, and small business income.

You’re Not Alone

Being self-employed shouldn’t make homeownership harder. You deserve a lender who sees beyond your tax forms and into your real financial picture.

Buying a Home in Texas While Self-Employed?

Let’s make it happen on your terms. Book a free discovery call with a local loan expert who understands self-employed income and the Texas housing market.