Have you ever thought how someone who is “self-employed” gets a mortgage? Normally anyone getting a mortgage has paperwork showing how much money they made with their employer. But what if the “employer” is yourself?
The guidelines for the home buyers who are self-employed have recently loosened up. An example in some case you may now only need documents for one year of income taxes to demonstrate what your income was, as long as the application qualified for automated underwriting. You can click on this link to get further information.
Help for “moonlighters”
Also, current lenders are using a new income calculation for those business owners who have on or little history of distributions. The newest loan guidelines are better for those individuals who “moonlight”. Those having side gigs might not always have to verify this income if they qualify using only their day job.
There are certain lenders where the “self-employed” will find it easier to get a mortgage and these include:
- Lending Tree – best for self-employed with good credit;
- Freedom Mortgage – best for mortgage rates that are transparent for self-employed;
- Better – which is best for self-employed with stable income history;
- Rocket Mortgage – best for those borrowers needing home loan experts to help them put documents together;
Working for yourself, you are already used to being more organized when keeping track of your income. This will certainly help you when applying for a home mortgage.
What lenders look for
Here are the things that most home lenders will be looking for:
- Income stability;
- Location as well as nature of your business;
- Financial strength of your business;
- Capacity of your business to produce adequate income in the future.