 TITLE: How to Calculate Self-Employment Income CONTENT: Calculating Your Income for a Mortgage Application\n--------------------------------------------------\nMortgage lenders like to see stability—long employment histories and steady income. Most prefer to see at least two years of self-employment to show your ability to generate income over time. To calculate your monthly income for a mortgage application, start with this simple formula:\n1.  Find your net profit before taking exemptions or paying taxes (from Schedule C of your tax return) for the two most recent years you filed taxes.\n2.  Add these two figures together.\n3.  Divide the total by 24.\nSo, if your net profit was $110,000 in 2019 and $104,000 in 2020, your average monthly income would be $214,000 divided by 24, or $8,917.\nYour lender will likely verify your income by reviewing tax returns or tax transcripts as well as bank statements. You may also be required to show 1099 forms and provide a profit and loss statement for the current year. END