How to best approach the mortgage process when self-employed
The benefits of self-employment are undeniable. If they weren't, then there wouldn't be approximately 41 million Americans who work for themselves, according to estimates from MBO Partners.
Being your own boss is extremely freeing, as you're able to set your own timetable, pursue your passion or simply do something you're particularly good at. But as with any job, there are some challenges to being self-employed. One of them can be applying for a mortgage. It's not that the process itself is any more difficult than it is for those who work for a business, but there is a certain level of due diligence that self-employed applicants must reach in order to check all the boxes.
Here are a few smart ways to approach the process and simplify it:
1. Prep your paperwork
Paperwork is the name of the game in mortgage approval. An accountant can provide tips for obtaining the proper documentation, such as tax forms, profit and losses, etc.
2. Contact a mortgage professional
Rely on the expertise of a real estate or mortgage professional rather than going about it on your own. They understand exactly what it takes to be approved for a home loan and can offer sound advice.
3. Maintain a clean credit profile
A high credit score speaks well to your fiscal responsibility, which will go a long way toward improving the likelihood of authorization.