Tips and Tools for Applying for a Mortgage as a Freelancer or Contract Worker

Many people dream of owning a home. However, not many people can afford to pay the full amount of a house in cash up front. A mortgage is the logical solution. If you're a freelancer or a contract worker, getting a home loan can be more challenging, as lenders may view you as higher risk. However, it isn't impossible. The real estate pros at Team Stiles offer some valuable insight into obtaining a mortgage.

Find Ways to Minimize Your Mortgage Needs

Take steps to counteract the innate risks inherent to mortgages for freelancers.

• Set up automated savings to start putting money towards a down payment, so you don't need as large of a loan.
• Save money for your down payment by reducing business overhead costs. Try tips like eliminating commercial rent and reassessing the need for software upgrades.
• Fully establish your business, and complete your Indiana LLC registration with the state so you can enjoy tax advantages and save more money.
• Steer clear of typical "red flags'' that might deter a lender from issuing a freelancer a loan, such as large tax deductions.

Get Your Financials in Order

Prepare your paperwork in advance to simplify the process.

• Use an online mortgage calculator to figure out how much you can afford to pay for a new house.
• Learn about mortgage pre-approval, which can help you look like a more serious buyer to prospective sellers.
• Request back copies of your tax returns from the You may need these to get mortgage pre-approval as a freelancer or contract worker without a steady paycheck.
• Gather any other essential paperwork you need to apply for a home loan.

Find a Fitting Home Within Your Budget

A strategic approach to house hunting will ensure you don't go over budget.

• Try to buy your home in the winter when the competition isn't as stiff.
• Find a reliable realtor through Team Stiles to guide your home purchase.
• Strive to make a down payment of at least 20% so you can forego the added expense of private mortgage insurance.
• Negotiate your closing costs to further save money.

Finding your dream home is only half the battle when you're house-hunting. Securing the mortgage you need to afford it is another challenge—especially if you're a freelancer or contract worker. The above resources can help you get the funds you need.

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