Archive for September, 2011

Sep
01

Qualifying for a Mortgage as a Freelancer

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At one point during the credit crunch, getting a loan as a freelancer was nearly impossible.  While it still remains difficult, the loan approval process is one of the biggest challenges.  Be prepared to submit additional paperwork to prove consistent income.

Tips for home-buying freelancers:

  • Pay off other debts, including credit cards, and build a cash reserve.
  • Identify the source of the down payment, whether a gift or loan from your 401(k), and be prepared to show statements.
  • Prepare for a closer examination.  Review at least 3 years tax returns.  If your income increased substantially from one year to the next, be prepared to explain why and whether you expect it to continue.  If your income declined last year, be prepared to explain that.
  • Check with local banks and credit unions which may be more inclined to spend the time necessary to qualify you for a mortgage.

It is always wise to address any credit problems before beginning the house hunt.  With a little preparation and answers to some tough questions, you may be able to get into the home of your dreams.

Inspired by New York Times article by Vickie Elmer, August 26, 2011.

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