Ultimate Mortgage Guide For The Self Employed_.jpg

Ultimate Mortgage Guide For The Self Employed

Are you self-employed? Have you been thinking about buying a home but you keep hearing that people who are self-employed have a much more difficult time getting a loan? While it can take a little more effort, it isn’t impossible, especially if you understand what you need to do in order to be prepared. CalSun Mortgage is ready to help you — so reach out today.

Know What Is Different Compared To Other Types Of Employment

When you are self-employed, there are extra requirements that a lender will be looking for in order to make sure that they are making a wise investment. This means that you will need to provide more documentation about your income, which could include a client list as well as business and personal tax returns. You’ll also need recent receipts and a profit and loss statement from your business accountant to help verify your income.

What Lenders Are Looking For

The documents listed above are the best way that you can prove to a lender that you will be able to make your payments each month. It is very important that you can show either a steady income or a rising income over time. Lenders are also going to be checking your debt to income ratio in order to make sure that you are not going to be living beyond your means if they approve you for a loan.

How To Prepare

In order to make the best possible impression when you apply for a mortgage as a self-employed person, there are a few steps you need to take. Most of these apply to people who are employed by others, but they are especially important for you. First, do not take on any additional debt. In fact, it would be a good idea to pay down as much of your debt as possible before applying for a mortgage. This includes limiting how much you use your credit cards. Second, you will want to have as large of a down payment as possible. While there are many loans out there that require a minimum of 3% down, as a self-employed person, you will want to bring more to the table. Third, be ready to provide extra information at the lender’s request. They aren’t trying to be difficult, rather, they’re working to get the clearest possible picture of your financial situation.

Ask Questions Frequently

One of the best things you can do for yourself during this process is to ask a lot of questions. If you aren’t sure about the best way to approach something, ask your lender. If you need advice about what steps you should prioritize when trying to get your application approved, ask. The more you know about the process, the more comfortable you will be.

CalSun Mortgage prides itself on being a lender that helps self-employed people get a mortgage for a home in the Los Angeles area. If you have questions about getting a mortgage, or you want to start the process, get in touch with us today.