Although owning a business can be one of the most profitable situations for people, it can also be one of the most difficult of situations to prove to a lender when you want to secure a mortgage. Yet, you can definitely qualify for a mortgage loan if you are self employed, when you follow these tips.
Tips For Approval For The Self Employed
1. Have the best credit that you can have. Credit will be one of the determining factors in this type of loan and therefore you should make sure that your credit looks as good as it can. Pay down debts that you have, make payments monthly and establish good credit history with several lenders.
2. Make a down payment. Some of the best loans for those that are self employed start with a significant down payment. If you can make a down payment at 25 percent or more, you will have little trouble getting the right loan for you.
3. Consider incorporating. By becoming a corporation, the liabilities of your business rest with the business, not with you personally. You also can say that you are an employee then with a W-2 which will help in securing a mortgage loan.
Provide Proof Of Income
Take with you your tax information and make sure to tell lenders that you can prove that you have income over the long term. For example, if you have been in business for five years and each year you have made the same or more than the last, this can help to show lenders that your income is stable even though you are self employed. Having records of this is helpful.
Having references or a spouse that works with their own income can also be beneficial means of securing a mortgage loan for the self employed. Chances are good that you can secure these loans when you have proven that your income is stable.
Recommended Mortgage Lenders for Self-Employed Borrowers - We maintain a list of recommended mortgage companies online and update the list regularly.
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