As of February of 2022, over 9.98 million Americans reported being self-employed. Self-employment offers plenty of benefits, but it can also have its downsides, too.
One of the biggest problems of being self-employed is struggling to provide proof of consistent income. The bad news is that you’ll need this important proof if you’re seeking out a mortgage. Are you currently wondering how to get a mortgage in 2022 while being self-employed? Learn the 5 steps you’ll need to take below.
- Get Your Finances in Order and Seek a Pre-Approval
Before you even think about getting a mortgage or buying a house, you need to get your own finances in order. You need to know how much of a house note you can afford and how much of a loan payment you can afford. Depending on your financial standing, you might also need to make a few moves to reduce your debt or improve your credit score.
Once you’re in a good spot, it’s time to seek out a pre-approval. Approach a mortgage lender that you want to work with and ask for a pre-approval. This pre-approval will come in handy once you start looking for properties.
- Go House Shopping
The next part is usually the best part. It’s time to go house shopping to find your dream home. Of course, the property needs to meet your family’s needs. It also needs to work for your budget. Once you find one that works, it’s time to make an offer.
- Apply for a Mortgage
Next, you’ll want to apply for your mortgage through your lender. At this point, your lender will want extensive evidence about your financial status. They’ll want to see proof of your income, they’ll look at your credit history, and they’ll also look into the property you want to buy as well.
- Go Through the Underwriting Process
This is where you could face some issues, especially if your mortgage request is denied due to inconsistent income or a lack of proof of income. If your lender denies your request during underwriting, then you may have to look at other options, like non-QM loans.
- Finish Up With the Closing Process
Once you do get a mortgage approval, you’ll go through the closing process. You’ll sign your mortgage and eventually get the keys to your brand new home! Congratulations; you’ve completed the process of buying your dream home!
How to Get a Mortgage if You’re Self Employed in 5 Steps
Owning a home is a priority for 75% of Americans. Don’t let self-employment be a barrier towards meeting your goals and making your homeownership dreams a reality. If you’re self-employed and you’re struggling to get a traditional mortgage loan, then know that you do have options.
