Tips For Getting A Home Loan When You’re Self-Employed

A lot of people are self-employed and find themselves a little concerned over whether or not they are going to be able to qualify for a home loan. There are self-employed home loan options out there, so you will want to do your best to make sure that you are prepared to apply for them. The more you are able to prepare, the easier the approval process might be. Here are some tips for you to consider for your own use:

Gather All Proof Of Your Income

A mortgage lender might simply ask to see some of your pay stubs if you were employed by a company. You do not have such things when you are self-employed, so proving your income is going to be a little trickier. Remember, as a standard employee somewhere, the lender can see how much money you make and the schedule for your pay dates. The pay is usually very consistent and does not fluctuate. It's the opposite for those who are self-employed, so you will need things like bank statements, 1099 forms, and maybe even your profit and loss statement that gets filed when you submit your income taxes.

Lower Your Debt-To-Income Ratio

Sure, everyone will need a healthy debt-to-income ratio when they are applying for something such as a home loan. However, you might need to make yours even more appealing because as someone who is self-employed, you may be considered more of a risk. You want to have as many favorable points as possible, and having a low debt-to-income ratio can really help. This can show the lenders that you can still afford the property, even if your income is a little lower at certain points of the year because you do not have nearly as much in debt.

Put Together A Bigger Down Payment

Money talks, especially when it comes to getting approved for a self-employed home loan. The more money you have for your down payment, the easier it can be to get the loan approved. This is because lenders will see you as a little bit less of a risk. After all, you wouldn't want to default on your new home loan and lose all of that money you put down for the house.

Now that you have these helpful tips to consider, you should find that you are starting to feel a little more confident in your ability to qualify for one of the self-employed home loan options. A good thing to do would be to go ahead and get in touch with a mortgage broker. They will have access to a large network of mortgage lenders and will be able to submit your application to those who are well known for working with those who have 1099 income.

Contact a company like NewFi Lending for more information.