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Mortgage for the Self-Employed

If you are self-employed, there are a few extra considerations that you need to keep in mind if you have homeownership as a future goal. While the path may have a few extra steps, there are still plenty of ways that self-employed workers can get a mortgage.

Treat Your Work as a Business

Whether you are new to being self-employed or have been working on your own for a while, it’s important to have your business finances in order. Not only will this help during tax time, it also shows potential lenders that you know what you’re doing. They will likely ask for multiple years of tax returns and business records. Having these in order will help the process.


Have a Strong Personal Financial History

This means plenty of savings and not a lot of debt. When you first start out, you may take out a business loan. You might also have outstanding debts from student loans or other training. Take some time to pay these down before setting your sights on a mortgage.

It also helps to have a high credit score so that lenders know that you are likely to make your payments on time. Keeping your debt low will help you credit score. Making payments on time will also keep that score high. You may also want to talk to your landlord about providing a personal reference about your on-time payment history as well.


Save Up a Down payment

Lenders love to see a high down payment from anyone but especially from those who are self-employed. Generally, the higher risk you are for a lender, the bigger they like for your down payment to be. Self-employed individuals are higher risk just based on the up and down nature of their employment.

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