Can I get a mortgage being self-employed?

Getting a mortgage can be a long and confusing process for almost anyone, being self-employed can add some extra issues to the process. There is always a light at the end of the tunnel though.  It may take more documentation and time but self-employed people do have options to get a good mortgage.

Since it can be difficult to prove your income when you are self-employed, mortgage companies have several options that you can choose from. There are low documentation and no documentation loans that require little or no documentation but you may need a high credit score and savings to be able to qualify for these options. In most cases they will use your tax returns, bank statements, balance sheets and more qualifying information to decide what mortgages might be available for you.

They will typically use two years of tax returns that they will get directly from the IRS for a fee.  They will look at the total income you claimed and then subtract the total expenses to work out your net income.  Then they will base your maximum loan amount on these figures. It definitely helps to have a twenty to thirty percent down payment as this will help raise your maximum loan amount. Often self employed people will pay higher interest rates than what you see advertised because your income is harder to prove and may naturally fluctuate. You should know what you truly can afford to spend and stick with that amount.

A few tips to truly help obtain the mortgage that fits you are: work on raising your credit score as high as possible, pay off as much debt prior to applying if you can, save at least six months of your monthly obligations, be prepared to be flexible and educate yourself on your options. So don’t give up ... your mortgage is out there waiting for you, self employed or not.

Carl Bishop
mysatxhomes.com