mortgage mortgage

Is It Possible to Get a Mortgage When I Work For Myself?

It’s no secret that lenders like for borrowers to have the means to repay their loans. That certainly holds true with a mortgage. In most cases, the income from a job will suffice. 

Where does that leave people who work for themselves? The fact is that you can find a lender who is willing to approve a mortgage for people who are self-employed if you know where to look. Brokers are a good place to begin the search. In the interim, you can do some preparation that will make the process simpler. Here are a few tips that will help. 

Confirming Your Income

Depending on the lender, several different documents may be used to confirm the amount of income you generate on average per month. Bank statements are a prime example. Assuming you have an operating account that receives all payments from your client base, the statements for that account will work well. Pair them with your own income and expense statement generated from your accounting software. You may also want to include a breakdown of the aging on your Accounts Receivables to provide a better idea of your cash flow situation. 

Don’t overlook the importance of supplying tax returns. Many lenders will consider those forms to be evidence of the amount of money you generate. 

How Your Credit Score Helps or Hinders the Effort

Traditional lenders will look closely at your credit scores. If they are below a certain level, they may not be interested in doing business with you. Alternative lenders are more likely to pay less attention to the scores and more attention to your income level. That can be great if you don’t have much of a credit history, or if you’re currently in the process of repairing your credit. 

In cases where credit scores receive more attention, a higher score does mean you’re more likely to lock in more competitive interest rates and terms. Even if you can’t get the best ones now, a few years of timely payments could position you to refinance and receive better terms at that point.

The Amount You Can Put Down on the Property

How much can you afford to put toward the property’s purchase? By making as large of a down payment as possible, you reduce the amount that you need to borrow from the mortgage lender. That in turn reduces the risk that the lender assumes by approving your application. When the amount you borrow is significantly less than the property’s current market value, you have a better chance of being approved. 

Considering the Idea of a Co-Signer

If all else fails, consider the idea of finding a co-signer. That individual should have great credit and be willing to stand with you in being responsible for the loan. This person can be a friend or a relative. The key is that the lender understands that if you default on the loan for any reason, the co-signer will take up the payments and ensure the loan is eventually paid in full. 

Whether you need a commercial property mortgage for your growing home business or want to buy a house that you can call your own, being self-employed does not have to stand in the way. Contact a broker today and outline what you have in mind. The solution may be easier to find than you think. 


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