Written by Adam Taylor
On the hunt for a home? Getting a loan to fund your property purchase can be intimidating in the simplest of circumstances, but for freelancers, it’s a bit more complicated. Getting a mortgage isn’t impossible if you’re self-employed, but you will need to take some extra steps. Here’s a look at how to tackle getting a mortgage as a freelancer.
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Secure a Substantial Down Payment
The more you have saved, the better bet you are for your lender.
- Many lenders require a larger down payment from freelance employees in order to ensure you’re a good investment.
- Do your research to figure out what kind of down payment you might need for different types of loans.
- If you already own property, determine its value to get a sense for how much you could make from selling your current home.
- Registering as a Virginia LLC could allow you to save come tax season which could bolster your down payment fund.
Your lender needs proof you’re capable of paying back your loan.
- Start by looking over this list of documentation all hopeful borrowers need when applying for a mortgage.
- As a freelancer, you’ll also need to prove you’re able to maintain your current income level.
- Most banks will need two to three years’ records of consistent (or better, increasing) income.
Think Critically About Your Future
Once you get the loan, you have to pay it back – are you sure you’ll be able to?
- Freelancing is an inherently unpredictable form of income – are you prepared with a sufficient emergency fund?
- If you transition into a traditional employment role, will your salary be enough to continue covering your mortgage payments?
- Remember, it’s always better to take more time to save and prepare than to dive into a loan you’re not ready for.
Although the process of getting a mortgage as a freelancer is a bit more complicated, you still have plenty of options when it comes to financing the home of your dreams. We hope this guide makes navigating the process a little less intimidating.
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