Are you self-employed? If so, you’re part of a rapidly growing segment of the US economy. In fact, an October 2016 study found that America’s freelancing economy has grown to 55 million people, or 35% of the entire workforce.

Getting a mortgage can be harder and more expensive if you’re self employed, but there are still mortgages available to you, as well as strategies to make yourself a more attractive candidate.
Here’s what you should know:
It can be harder to find mortgage lenders who will work with you
As a self-employed worker whose income can vary each month, you may not be seen as an ideal borrower by mortgage lenders. And you might have to shop around to find a lender willing to work with you.   

Mortgage lenders traditionally prefer borrowers with steady, verifiable income records that can be easily documented through W-2 Forms.  This gives lenders confidence you’ll be able to continue making mortgage payments in the years ahead.
As a self-employed borrower / customer, you should be able to verify up to two years of stable self-employment income using your federal tax returns. To help review and predict your employment stability, your mortgage lender will also consider:

• Your location and type of business
• Demand for your product or service
• The current financial strength of your business
• A signed statement from your accountant
• Your businesses’ future outlook

Having good credit is essential
As with salaried employees, self-employed workers should have good credit when applying for a mortgage. The most important part of establishing a good credit rating is paying your bills on time, every time. You can also obtain a free credit report online to analyze your monthly expenditures and resolve any delinquent accounts. There are many free resources online to check your credit score.
Less debt increases mortgage opportunities
The lower monthly debt payments you have when entering the mortgage process, the easier it is to complete your mortgage payments. If you’re self-employed, try to pay off any credit card debt and car loans before applying for a mortgage. This could also help you qualify for a higher loan amount as you’ll have more cash flow.
Getting a mortgage as a self-employed worker is slightly more difficult, but very possible
If you’re part of America’s rapidly growing number of self-employed workers, homeownership can be in your future. By following the suggestions in this article and working closely with your mortgage lender, you’ll have the opportunity to own your home and work in it too.
For more information about qualifying for a loan as a self-employed worker, contact me today!