If you’re like many people, you’re self-employed – and that means your process of applying for a mortgage to buy home or land for sale in Lake City will be different than it would if you worked for an employer. Here’s what you need to know about applying for a mortgage when you’re self-employed.
Applying for a Mortgage When You’re Self-Employed: How It’s Different
More and more people are freelancers, contractors and gig workers than ever before in the nation’s history, so it makes sense if that’s the path you’ve chosen for yourself, as well. In fact, over 50 million Americans have worked as freelancers this year – that’s about 35 percent of the country’s workforce.
Unfortunately, though, applying for a mortgage when you’re self-employed, whether you’re buying a home or land for sale in Lake City, isn’t any easier than it would be if you worked for a standard employer.
Now – especially in the post-COVID landscape – you need a lot more documentation to prove your income than you did even last year. Because of the economic issues the pandemic caused, lenders are being especially cautious when figuring out who qualifies for a mortgage. They’re looking hard at whether people will likely be able to repay them.
In the past, it was simple enough: You provided the prior year’s tax returns (or even the prior two years’ tax returns), some proof of your current income through bank statements, and you were good to go. Now, you have to use a year-to-date profit and loss statement, business bank statements, and in some cases, even more documentation. Providing proof to lenders that you’re capable of repaying lenders has become a little more difficult.
You’ll still have to take all the usual steps before applying for a mortgage when you’re self-employed, too, such as:
Are You Buying a Home or Land for Sale in Lake City?
If you’re moving to Lake City, we can help you find the perfect place to live. Call us at 386-243-0124 to tell us what you want from your home and we will begin searching right away.
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