How to Qualify for a Mortgage as an Independent Contractor

Are you getting ready to buy your first home? If you’re a freelancer, contractor, or covidpreneur, you may not know where to begin when it comes to mortgage approval. By looking up everything you’ll need to take care of ahead of time, you’ll have an easier time qualifying, and these resources will help you at every step of the way!

Resources for Freelancers

As a freelancer, you’ll need to go the extra mile to show lenders that you’re a good candidate for a mortgage with a low-interest rate.

• Boosting your income will help you get approved, so come up with a strategy to raise your rates and gain more clients!
• Lenders will need to analyze your tax documents. Implement an organized bookkeeping system to track your invoices and receipts.
• Proving that you’ll have a steady future income through your business is essential. Securing retainer contracts with valuable clients can help.

Personal Finance Tips

You’ll have to prove to lenders that your business is financially stable, but you’ll also need to make sure that your personal finances are in good shape.

• Your income can change from month to month, so figure out your average monthly income to decide your house-hunting budget.
• Once you’ve outlined your budget, you’ll know how much to save for your down payment, and you can set up an account for this purpose.
• In the meantime, start building up your emergency fund to cover any future home maintenance costs.
• Lenders prefer mortgage applicants with high credit scores. This guide will help you get your score up!
• As a COVIDpreneur or contractor, registering as an LLC could bring tax advantages so you can save for your home.

The House Hunting Process

Finding the right home can be hard work, but these resources will help you in your search!

• Research areas where the home prices fall within your budget and begin scheduling viewings.
• Concerned that you’ve walked into a predatory mortgage? These guidelines will show you how to back out legally.

When you work as a COVIDpreneur, freelancer, or contractor, you develop a different approach to your finances than those who hold traditional jobs. But your unique financial situation does not have to prevent you from qualifying for a mortgage. By following the tips laid out in these resources, you’ll be able to buy your ideal property!

If you need help with your home loan, Ruoff Mortgage can help open those doors. Call us today at (260) 999-6200 or use the contact form on our website.