Buying a home is a milestone that so many people want to achieve. If you are self-employed, however, it may not be as easy to get a mortgage. There may be some documentation and paperwork that you may have a hard time providing, affecting your chances of having your mortgage approved.
If you have a non-conventional source of income, don’t lose hope! People who are self-employed have been able to get approved mortgages and buy properties for themselves in the past, so there is no reason to think that you will not be able to take advantage of this type of mortgage as well. The key is to know the important documents that are needed and to be prepared with them when you apply. This blog post will shed some light on how to buy a home if you are self-employed.
How to Buy a Home If You Are Self-Employed: 4 Easy Steps
You may have heard that it is a little more difficult to apply for a mortgage loan if you are self-employed. The truth is that you just need to be a little more patient and have knowledge about how to process your application. Here are a few steps on how to successfully apply for a mortgage as a self-employed worker:
- Gather and Fill Out Paperwork. Regular workers who apply for mortgage loans will need to fill up W2 forms and other forms that serve as proof of income for the mortgage application. If you are self-employed, however, you may not have income that is easily or traditionally documented. It is good to compile a copy of your bank statements, or any payslip or document that can show how much you earn. Gathering these documents and filling out the necessary forms and paperwork beforehand is a good practice.
- Look into Your Credit Report and Make Sure It Is Solid. Before going into a lending office and filing your application, it is a must that you make sure that your credit report and credit history are in good standing. Keep in mind that this is one of the strongest bases that a lender may use to determine if your loan will be approved or not. You don’t have to have perfect credit, but making sure that it is relatively high will go a long way.
- Be Patient. A self-employed worker will not have the traditional income documents and tax returns that regular workers do. This may make the application process a little bit longer than it normally would be. Being patient through this process is necessary. However, if you feel that you have waited for quite some time without a result, it is alright to follow up your application with your lender.
- Start the Filing Process Early. Lastly, it is a good idea to keep good records of your income documents as well as your credit reports and start the filing process early. Having this head start will help you ensure that everything you need will get done in time for the application process when it starts.
First Time Home Buying Expert in Michigan
If you are self-employed and thinking about buying a new home, getting a mortgage is the best way to reach this goal. Although waiting times vary, and you may need to be a little more patient. The key is not to give up. Keep applying with different lenders. Not all of them will have the same requirements and the same strict approval process and policies. At the end of the day, lending agencies are also going to benefit if you get an approved mortgage loan from them; so one way or another, you are going to be able to get your mortgage loan.
Should you be a first-time home buyer in Michigan and need a mortgage, come and apply with Mortgage City! We have one goal – to fulfill your financing goals and make you a happy homeowner. Mortgage City is a licensed mortgage originator based in Royal Oak, MI. Our business is built on our industry expertise and relationships, which we apply to every loan we service. Interested parties may call (248) 930-8709.