How To Get Approved For A Mortgage If You Are Self-Employed
The mortgage loan approval process is not a simple task for anyone, but it is even harder for a person who is self-employed. Self-employment offers a lot of advantages and benefits to people, but it can be harder to prove your income if you own and run your own company. If you are self-employed and want to buy a house, here are some tips to help you get approved for a mortgage loan:
Show your pay stubs
Do you take a regular paycheck from your business? A lot of self-employed individuals do not, and this is one of the reasons it is harder to get a loan if you own your own business. If you take regular paychecks, you could simply show the lender these stubs to prove your income. If you do not, you will have to be able to prove your income in other ways.
Offer your tax returns
Most lenders want to see tax returns of all people applying for a loan, even those who are not self-employed, and that is because tax returns show income and consistency with income. To qualify for a loan, you should be prepared to offer the last two tax returns you have. If these tax returns prove your business makes a decent amount of money and that you have access to this money, it could improve your odds with getting a loan.
Give them bank statements
Another good option you have as a self-employed person is to give the lender your bank statements. Bank statements show a lot of different things, including all the deposits you make and all the expenditures your business has. Your bank statements can also show the lender all the withdrawals you have taken for yourself, and this is important if you do not take regular paychecks.
Make sure you are financially ready
The other important step to take before you apply for a loan is to make sure you are ready financially for this big step in life. To do this, you should check out your current credit score. You will need to have fairly good credit to qualify for a loan. In addition, make sure you have very few debts and that you have some cash in the bank for a down payment.
These are some tips to help you get approved for a mortgage loan if you are self-employed. If you are interested in learning more about this, contact a mortgage lender like Blue Wave Funding today.