Self-employed life is amazing (for the right people, of course). No boss, flexible schedule … You can’t beat it! It’s not all sunshine and roses, though. When it’s time to get a mortgage, freelancers, gig-workers and the like sometimes face sticky situations.
Here’s the good news: You’re not alone. Approximately 35% of the American workforce is self-employed, and we can assure you that many of these people own homes! Before you jump into the housing market as a freelancer, read on to learn the secrets to mortgage success!
The Rules Are Different for Self-Employed Borrowers
It sounds unfair, but it makes sense: Sometimes self-employed individuals are paid erratically. Lenders view this as a risky proposition. Because of that, here are a few key documents that you’ll need to prove that you can afford that mortgage:
- A minimum of two years of federal tax returns
- Corporate tax returns
- At least two months of bank statements to show that you can afford the down payment and closing costs
- Two recent business invoices
- Applicable licenses associated with your business
- Letters from current clients stating that they plan to continue working with you to indicate that your business will remain viable
Stay in Control of the Mortgage Process
If you are a self-employed borrower, you’ll rest easier knowing that you’ve done everything in your power to get the mortgage you deserve. Here are some actions you can take to facilitate a smooth approval:
- Make sure your credit score meets the minimum requirements for the type of mortgage you’re seeking.
- Visualize the home you want, and talk to a loan officer to see if you have enough income to make it happen.
- Consider going above and beyond in the down payment department to improve your DTI.
- Work with a mortgage broker who will help you shop around to get the best rates and terms.
Contact Us Today!
If you are self-employed, you have options at the mortgage desk! Connect with MortgageDepot today to learn how your freelance income can help you reach your real estate goals.
Contact one of our loan consultants today to learn more!