Real Estate Updates
Mortage

HOW TO GET A MORTGAGE WHEN YOU’RE A SELF-EMPLOYED HOME BUYER

mortgage when self employed

When you are self-employed and you want to buy a home, you fill out the same mortgage application as everyone else. Mortgage lenders consider the same things when you’re a self-employed borrower: your credit score, debt you have, assets and income.

Qualifying for a Mortgage When You’re Self-Employed

If you work for yourself, you’re used to having to be more organized and keeping track of your income. That’ll help when it’s time to apply for a mortgage and so will this overview of what to know and how to prepare.

What Are Mortgage Lenders Looking For?

Mortgage lenders are looking for,

·         Income stability

·         The location and nature of your self-employment

·         The financial strength of your business

·         Ability to generate sufficient income in the future.

Documents to Provide

Employment verification: It is a proof that you are self-employed and it could include emails or letters from the following.

·         Current clients

·         A licensed certified personal accountant (CPA)

·         A professional organization that can attest to your membership

·         A Doing Business AS (DBA)

·         Evidence of insurance for your business

Income Documentation: Have proof of reliable income and you are one step closer to getting approved for a mortgage. Your lender will ask for the following.

·         Personal tax returns

·         Profit and loss statements

·         Bank statements

 Tips to Put Your Application Forward

1.      Check your debt-to-income ratio

2.      Keep an eye on your credit

3.      Keep business expenses separate

Bottom Line

In order to apply for a mortgage while self-employed, you’ll need to verify and document your income while maintaining a lower DTI and higher credit score.

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