If there’s one thing every home buyer has to face, it’s the different hurdles that need to be dealt with. But then if you’re self-employed, the struggle is even more stressful.
It’s no secret that buying a house is not a walk in the park. Everyone has to go through a long and winding road of loan applications, processes, and waiting games.
Getting a mortgage is especially harder for them and applying for a loan is only the tip of the iceberg. This is why it’s best to plan ahead and prepare for what you’re about to deal with. And although preparing doesn’t promise a 100% stress-free process, it would definitely take a lot of the burden off.
Improve you credit
If you’re self-employed, you might want your lenders to see that you have a satisfactory credit score. Lenders usually use this as a basis for approval as well as getting the best rates for you.
However, boosting your credit doesn’t happen overnight. To keep your status in check, try to keep your balances low. Continue paying your dues on time. And during your mortgage application process, try not to apply or open other credit lines and add up more debts in the process. This usually doesn’t give a good impression for most lenders.Click to See the Latest Mortgage Rates»
Organize your expenses
It’s not illegal to keep both personal and business expenses under the same account but it’s not really a good idea if you want to prove the state of your income.
Other than making a good impression, lenders tend to have an easier job in going through your expenses by keeping separate accounts for business and personal use. This also helps you deal with taxes with lesser frustrations.
Prove your ability to pay
Of course, lenders would like proof that you can carry on a mortgage in the long run. Before they grant a loan, they want to know if you can pay them back. This is why they look into your income, through necessary documents.
In cases where you’re self-employed or running your own business, they would need to verify the existence of your business by asking for proof of your business license, a letter of verification from a Certified Public Accountant or an Enrolled Agent.
Prepare the paperwork needed
Secure the necessary documents your lender might need. These would prove that you can be trusted with a mortgage.
Along with showing your business license and CPA letter, documents like bank statements, tax transcripts, and the like are usually looked into.
Look into different loan options
Try to shop for loans that you think you could qualify. You can check if you can try your luck with a traditional mortgage and see if you can score a loan.
But if you can’t there are alternative loans that cater to unique situations just like self-employed borrowers. Try to research about different non-qualified loans like stated income loans and others. Ultimately, be careful when you choose a mortgage. Weigh in your options carefully before you jump to a decision.Click to See the Latest Mortgage Rates»