Self-Employed? You Can Still Get a Mortgage
Many self-employed individuals find it challenging to secure a mortgage. Often, lenders are hesitant to offer services to those whose income may fluctuate or seem relatively unreliable. However, being self-employed doesn’t automatically disqualify you from finding a lender. It just means you need to make sure you have everything in order before going forward.
To help you secure a mortgage as a self-employed individual, here are some tips to get you started.
Get Your Savings in Order
One of the easiest ways to make lenders more secure with the idea of providing you a loan is to get your savings in order. You need to have a suitable down payment as well as money for additional requirements like property inspections. That way you can demonstrate you have all of the funds needed to complete the purchase ready and available.
In some cases, the funds may need to be considered vested. Often, that means they will need to have been in a savings account for a specific period of time, such as three months before you apply for the mortgage.
Additionally, work to save about one year of potential mortgage payments in a separate account. This helps provide the lender with additional security that you have backup funds available should your financial situation change unexpectedly.
Gather Your Documents
Part of the mortgage process involves gathering documents about your income, often over the course of a few years. You will need to have evidence regarding the amount of money you have taken in as well as what you can expect in the future. This helps lenders understand what your earnings potential for the future appears to be based on past experience.
When self-employed, the more information you can provide the better, so feel free to collect every detail that is available to show that your income can be viewed as stable. This can help qualify you for non status mortgage 2016.
Work with a Lender
Once you know everything is in order, you can begin exploring options with available lenders. You will need to find financial institutions that are open to lending to self-employed individuals who may need to self-certify their income. Some lenders are more open than others, so take your time to consider options outside of your primary bank. In some cases, other lenders may offer more favorable terms, so don’t hesitate to shop around.
After reviewing your options, you can begin working with the lender to secure your financing. They will review your documentation, and pull your credit report and score. After evaluating your situation, they will be able to make a determination regarding whether or not you qualify and how much they are willing to lend. If your application is approved, you can move on to the next step.
Find a Property
When the approval paperwork is in your hand, you can look for a property to purchase. Until you find a home, have an offer accepted, complete any necessary inspections, and move to close, you don’t technically have a mortgage. That means, should your situation change, you can often back out of the process without any penalty.
If you do go through the above steps and move to close the purchase, your lender will create your mortgage based on the purchase price, and other agreed to terms. Then, you simply work to repay the funds as any other borrower would, and you can enjoy your time as a homeowner.