Is it Possible to Qualify for a Mortgage Without a Full-Time Job?
Jobs are changing. There are not many people that plan on getting a job with a company and then staying there for 30 or 40 years until they are ready to retire. The millennial generation has been helping to inspire each other, and others, to pursue their dreams and to complete work that they are interested in doing instead of working a job they don’t care about. That means there are lots of people that are working part-time jobs and doing a side hustle that they enjoy. Technology has expanded our options for working as a freelancer from home instead of heading into an office.
People are able to make money doing this and keep the bills paid, but will they be able to get a mortgage lender to approve them for a loan? It can be difficult for lenders to predict what their future income will be and to see proof of what they are actually making, but it isn’t impossible. Follow these tips to get approved for a mortgage without a traditional full-time job.
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Help your lender out
Your lender needs to understand what your job is in order to approve you. That means it is your job to explain to them and educate them on what you do and how you make money. They want to see that your work is consistent and stable, so you will be able to continue paying the mortgage long after they put you through the approval process.
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Gather your documentation
If you work like this, you most likely do not have a W-2 to help prove your income. But your lender still needs to see proof of it. Get prepared. Pull your credit report to get familiar with your credit score and report. Find a way to show your proof of income, references, bank statements, previous employers, and landlords. Look for anything that will help your lender feel comfortable that you are responsible and will be able to pay your bill.
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Don’t use so many deductions
Working from home and being a business owner opens up a door for lots of business deductions. This is helpful come tax time to allow you to reduce your tax liability, but it can hurt you when you are trying to obtain a mortgage. You want to show your income as high as you can when trying to obtain a loan. When you deduct all of your expenses, including things like cell phone bills and the home deduction, your income ends up looking a lot lower than what it actually is.
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Work with your lender
Talk to your lender as soon as you think you are interested in obtaining a mortgage. Your lender will be able to look at your specific situation and see what changes you need to make to help yourself get approved for a mortgage. They can tell you what kind of numbers to shoot for and walk you through the pre-approval process to see where you currently stand.
It’s important to start working as soon as possible in order to make your process run smoother. Find a lender that is familiar with working with entrepreneurs and those without traditional income. You can use their expert advice to your advantage.