When it comes to being self employed, getting a home loan may be more difficult. The lender will want to see various proofs of consistent income which will include your tax filings and all of your schedules that go with it. The lender and underwriting will go through every little piece if income to try to find you the best possible self employed loan to buy a home possible.
If you’re someone with bad credit, then it may be more difficult to get a self employed loan to buy your home. The awesome news about buying a home in this day in age is that there are many options out there for people with good, medium and even bad credit to. The Associates Home Loan of Florida offers a wide range of loans for anyone to help them buy a home.
Options from The Associates Home Loan of Florida include private lending, hard money loans, and bad credit loans. The only downside to getting a home loan or self employed loan when you have bad credit is that the rate of interest will be higher than what other people are paying. This is due to your credit score being considered poor or bad. A person with a low or bad credit score is known to be more at risk for going into default with their loan.
Being able to qualify for a self employed loan for a home when you have less than stellar credit can make you feel more confident and in turn, allow you to move forward with your next goals in life.
Tips to Qualify for a Self Employed Loan for Home
- Have all documentation for the last two years, including a profit and loss statement for the current year in question to have proof of self employment income for the lender to review.
- A copy of your business license that proves you’ve been in business for at least two years may be required by the lender.
- Determine what you have for assets and down payment. Some lenders will require that you have something to put up as collateral or down payment, especially when trying to qualify for a home loan as a self employed individual who has bad credit.
- Find out your debt to income ratio. Every lender will want to see a specific number or percent when it comes to debt versus income. This ratio needs to be at a reasonable level, I believe somewhere around 33% or less in order to gain approval for a home loan.
One issue that comes up with self employed home loan inquiries is that self employed business owners often have some of their own business debt. This business debt could be brought in and counted as part of the debt to income ratio, which will make your ratio a bit higher. Be certain to review all of your income and expenses as well as debt ratios before calling a lender, just to see if you’re even near the ratio allotted to get a home loan.
If you’ve reviewed all of your own information and you think that you’re ready to see what you can qualify for, then it’s time to give The Associates Home Loan of Florida a call to see how they may be able to help you out in getting that loan you so desire and need to move forward with your next goals in life.
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