Updated: Dec 26, 2020
In the US today there are over 16 Million self-employed workers based on a recent study by Pew Research Center. Owning your own business can be risky, yet highly rewarding both personally and monetarily. Except when it comes to getting approved for a home loan.
At Efinity Mortgage, we partner with you through our simple process to give you the best opportunity to get approved and into the home of your dreams. Here are a few helpful hints to improving your odds prior to applying.
Eight Simple Steps to Improve Self-Employed Mortgage Approval
As a small business owner, freelancer, independent consultant, etc. it is a very common requirement to show additional documentation and proof of income. Here below are a few simple ways for this documentation prepared and to shed a positive light on your finances.
Lower your debt load
Reduce your tax deductions
Register and license your business
Keep your business and personal accounts separate
Pay yourself a W-2 wage rather than an guaranteed owner's draw
Save up for a larger down payment, you may even leverage tap your IRA or 401(k) if available
Maintain good records by leveraging tools like QuickBooks to help track and classify income and expenses. This will help you generate a profit and loss statement, which lenders often require from sole proprietors.
For more helpful hints click on the chat icon to speak with a loan professional or get started with your online application today!