Self Employed? You Can Get a Mortgage and Here’s How:
There is a joke about Asheville, “Why did the hippy move to Asheville? Because he heard there were no jobs.”
We laugh about it, but the truth is moving to Asheville without a job can be a very challenging prospect. In fact, the top advice many give to those considering making our mountain town their home is to bring their job with them. And in today’s world of digital connectivity, that is more possible than ever.
When the primary industries are hospitality, service, and medical, not everyone can make a living wage even if they work more than one job. So freelancers and self-employed individuals make up a large portion of our economy.
What does that mean when it comes to buying a home? You know a big part of the home buying process is about your income and the ability to be qualified for a loan. But when you’re self-employed, money can be a little more irregular than the steady paycheck lenders may expect. There’s good news, though. There are ways to qualify for a mortgage if you’re self-employed, and we can help you find out how.
How much can you really afford?
Self-employment is a very different beast than traditional employment. You may own a company or you may work freelance. Income may be variable. So it is essential that you can work with a lender who can dig deep and determine not just what you can afford now, but how your payments may affect your income in the long run.
How can you fix your credit score?
Some small business owners or freelancers have accounts tied to their personal finances that can impact their credit. We recommend speaking with a credit repair specialist such as Mark Silver at Best Credit RX. You can contact him here at our Prime Mortgage Lending of West Asheville office.
Pay with a larger amount down.
There are a lot of reasons people look into zero-down loans. The high outlay of money up front can feel cost prohibitive for the long run, but it may be the best way to get a great rate that can carry you through the fluctuations you’ll have in your business. Paying more up front can lower your monthly payments.
Pay off your consumer debt.
You may always have business debt as a function of your job, but that doesn’t mean you have to have a lot of consumer debt. Look at your personal credit accounts and see how you can manage to increase payments to pay those off sooner. When a business pays for a debt over 12 months, that may also be omitted from your mortgage qualifier or debt-to-income ratio.
Demonstrate established track record of self-employment.
Of course, someone who quits their corporate job to start working for themselves may not qualify immediately for a loan. Lenders want to see a track record, so you need to be able to prove that you’ve been active in your industry for a solid two years. That is the bare minimum and is standard across all lending institutions.
Do you want to learn more about how to qualify for a mortgage if you’re self-employed? The team at Prime Mortgage Lending, Inc. can help, so call today.