3 Tips For The Self Employed On How To Secure A Mortgage

By
Real Estate Agent with PorchLight Real Estate Group

Freelancing? Three Tips for How to Secure a Mortgage if You're a Self-employed Entrepreneur

 

If you are self-employed, either as a freelancer or as the owner of your own business, your income can fluctuate greatly from year to year. That can make it difficult to get approved for a mortgage, although there are some things you can do to improve your chances. Here are three tips for securing a mortgage if you are self-employed.


Make Sure Your Credit Score Is In Good Shape

 


While your ability to pay back a mortgage is the most important factor in approval, your credit score is a close second, and that goes for every borrower, not just those who are self-employed. If you have a credit score in the high range -- something above 750 or 760 -- it will help you get approved for a mortgage. To boost your score, make sure you pay all bills on time, pay down your debt levels and don't make any new big purchases or apply for new credit soon before you apply for a mortgage. 

Have a Large Down Payment

 


The more money a bank lends you to buy a house, the more risk it is taking on that the money won't be paid back. If you are self-employed and considered a higher risk to begin with, one way you can alleviate some of that risk is to be able to put down a large amount of money. Putting down 20 percent is standard for a conventional loan, and you should be willing to contribute at least that much. Putting down at least 20 percent also will save you money in the long run, because you won't have to pay for mortgage insurance and you will pay less in finance charges over the life of the loan. 

Have Significant Assets


One way to put a lender at ease about your ability to pay for a mortgage is to have significant reserves in the form of assets. If you have large amounts of money in regular savings, brokerage and retirement accounts, it offers a reserve for you to tap should your income take a dive. Other forms of property, such as personal and business property that's paid off and has value, also help. 

 

 

If your self employed and need references to a lender certainly ask friends and family.  Your local trusted Realtor may also have suggestions, if you are in the Denver Metro area contact.

 

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Rainmaker
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Jennifer Mackay
Counts Real Estate Group, Inc. - Panama City, FL
Your Bay County Florida Realtor 850.774.6582

Always good to see information for the self employed such as ourselves

Thanks for sharing Sandra

Feb 10, 2016 08:58 PM #1
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Rainer
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Sandra Jarock

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