Applying for a Mortgage: What Freelancers and Independent Contractors Should Know

Most Americans dream of buying a house, but few can afford to do it without some sort of home financing. For freelancers and independent contractors, securing a mortgage can be a bit of a challenge, especially for those who are buying a home on their own and without an employed spouse, partner, relative, or friend.

Before beginning the process of applying for a home loan, eChannelHub presents several things self-employed individuals should know about securing a mortgage as a freelancer or independent contractor.

Take Control of Your Finances

To achieve your dream of buying a home, you’ll need to begin the process early on — and start by saving for a down payment and improving your credit score.

• Calculate your down payment amount to get an idea of how much you’ll need to save before buying a home.
• Monitor your credit and take steps to improve your credit score, if necessary.
• Save a portion of every paycheck and carefully track your business spending.

Apply for a Home Loan

These resources will help you to understand the steps you’ll need to take when applying for a mortgage as a freelancer or independent contractor.

• Learn about the key differences between mortgage prequalifications and preapprovals.
• Gather proof of your income, such as your bank statements, annual tax returns, and profit and loss statements.
• You may want to combine PDFs for all these documents into one file.
• Compare available loan programs, including FHA loans, VA loans and fixed-rate vs. adjustable rate

Search for Your Dream Home

Once you’ve saved for a down payment and compared your financing options, you’ll be ready to search for the home of your dreams.

• Research home prices in your desired area to get an idea of which areas are affordable.
• Partner with an experienced real estate agent at JMI Properties to walk you through the homebuying process.
• If you work remotely, look for homes with plenty of office space for your home-based business.

Applying for and securing a home mortgage is slightly more complicated when you’re working for yourself, but it isn’t impossible. These tips and resources address some of the questions you may have about the mortgage application process, as well as the steps you can take to improve your chances of qualifying for a home loan!