Whether it’s working on a freelance basis or running your own business, the gig economy continues to grow its number. According to Forbes, the number of self-employed individuals is foreseen to grow at 50% by 2020 and a lot of the reasons are because of the opportunities that come with the advancement of technology.
Today, the growing trend of independent work could be because a lot of the workforce see a sense of freedom that they seldom see when juggling a regular nine-to-five job. A lot of people ask if it’s worth it. Some say it it is. Others would tell you it’s not always what it’s ought to be.
In the mortgage industry, lenders would want to see regular employment history from their applicant along with the needed good credit scores, low DTI ratio, and other necessary requirements before approving a loan.
Whitney Fite, senior vice president, strategic accounts at Angel Oak Home Loans in Atlanta predicts this to be the same predicament in the next three years and said: “With the gig economy, we’re seeing less and less people fitting in that box.” This means independent workers would likely have a harder time to get an approved loan but that doesn’t mean they can’t.
Prove your financial capability
It could go from reducing your debts, improving your credit score or cutting costs. Show any proof of your assets and if you have your own business, show the stability of its income.
Other than saving money for your down payment, also show that you have more savings than your debts. Saving more than the standard percentage required for your down payment could also reduce your loan amount so it’s a win-win since your lender sees more assets from you and you get a lower mortgage.
Gather all documents needed
Anything from proof of income and assets, expense records, tax returns and some others would likely be looked into due to the nature of your employment. Being prepared always helps in order to avoid mishaps and delays.
See other options
Since getting a mortgage is a bit more complex for the self-employed workers, there are other ways you can easily get a home loan. Learn about co-signing maybe with a family member or look into “bank statement” mortgage programs which could be a suitable option for those in the self-employment setup.
It also helps to let your lender know about the nature of your job. Show articles, documentation, or ads that would show and help your lender see the bigger picture of what you do.
In the end, hope should not be lost. The nature of your job should not be a reason why you can’t find a house you can call home.Click to See the Latest Mortgage Rates»