From making your own schedule and being your own boss to doing what you love and having flexibility, being self-employed has its benefits. However, financing your new home may be challenging, though not impossible when you’re a freelancer, gig worker, or independent contractor. Here’s what you need to do to present a healthy financial picture to qualify for a mortgage when you’re self-employed.
- Evaluate your debt-to-income ratio – Take a look at your income and debt to better understand your financial status. One way to improve your financial status is to increase your income, reduce your debts, or both. This will help to have a higher credit score and qualify for a lower interest rate for one of our new homes in Arlington TX.
- Provide your work history – A lender will want to see at least two years of a tax returns. You may also need to show your profit-to-loss statement in addition to your business statements. Being able to show you’ve been working regularly will help you be more attractive to a lender.
- Be able to verify your income – You’ll need to show a lender that you’ll be able to pay the loan back. Be able to provide proof of income and that you’ve been working consistently for the last two years.
- Save for a large down payment – Putting down a larger down payment can help you secure a loan and possibly qualify for a lower mortgage rate. Look to put down at least 20% of the purchase price.
- Have an emergency savings – Life happens. Lenders may feel more comfortable lending money to you knowing you’ll be able to still pay your mortgage if something comes up.
- Keep your business separate – Don’t mix your business and personal expenses. These should be kept separate so you can track your business expenses and know your cash flow. You’ll also keep your credit utilization down.
If you’re a self-employed worker looking for a place to call your own, look no further than our master-planned community. We are now selling new homes in Arlington TX at Viridian – Bird’s Fort. This townhome community offers ,553 to 2,083 square feet of living space with two and three bedrooms, up to two-and-a-half baths, and a study. Contact us at 469-294-0196 to learn more.