When you work as a freelance contractor rather than for an employer, you may think that the dream of looking at homes for sale and buying your dream home are life goals that are off-limits to you. However, this does not have to be the case. There are ways that freelance contractors (self-employed workers) can purchase homes and get mortgages for that purpose. Get to know some of the steps that you will need to take to better your chances of successfully purchasing a new home when you are a freelance contractor.
Make Sure You Give Yourself Enough Time To Prepare
It can take a significant amount of time for anyone to be ready to buy a home. However, for a freelancer, this time commitment can be even more serious. Generally speaking, a self-employed person or freelance contractor will have to be able to prove that their business endeavors provide them with a steady income that would make it possible for them to keep up with their mortgage payments.
This documentation can take two or more years to build up and track. This is because lenders want to see a history of consistent income as well as of increased income. So, before you are ready to really start seriously looking for a house to purchase, give yourself a few years of time to prepare financially and to keep careful and close track of your income.
Watch Your Debt And Spending
Keep in mind that your debt-to-income ratio will also be a big factor when you are applying for a mortgage loan, especially if you are a freelance contractor. Watch your debts in those two or more years of preparations and try to pay down your debt to a manageable level. Do not let payments get behind either, as your credit score will also be a telling factor.
If you can, start setting money aside for savings every month as well. The more you set aside and save, the better your financial picture will look to lenders. This will also give you a nice nest egg for a down payment when you do find a house for sale that you want.
Do Not Be Discouraged If Some Lenders Reject You
Even with the most careful and meticulous documentation of your finances and careful planning, some lenders may just not be willing to work with you if you are a freelance contractor. Many times, freelance income is seen as risky because it is not guaranteed and some lenders have stricter criteria than others on the amount of risk they are willing to take on.
You should not let this discourage you if a lender or two is just not willing to work with you. There are a myriad of mortgage lenders out there. So, as long as you have the right documentation and can prove your steady income, you will be able to find the right mortgage and lender for you.
Now that you know more about getting a house when you are a freelance contractor, you can be sure that you take the steps necessary to get yourself a mortgage and purchase the house of your dreams. Check out a real estate company like Stacy Sells for more information.