Freelancers and Self-Employed Folks Can Buy, Too

Fact: Buyers with W-2 jobs have a quicker pre-approval process because their income is more simply verified, but self-employed, freelance, and seasonal workers are still evaluated on the same factors as other applicants.

Fiction: Many people without W-2 jobs believe getting a mortgage will require a considerably higher down payment, if it’s even possible at all, but I’m here to tell you that self-employed, freelance, and seasonal workers are still evaluated on the same factors as other applicants: income, credit , debt, and assets. The difference is that buyers without W-2 jobs must provide more documentation to prove they have a stable income that is likely to continue in the future.

This typically requires two years of records, including personal and business tax returns, bank statements, and income verification (which can be a business license or proof of business insurance). There are times this process can take a little longer, and sometimes you may make adjustments to your tax write-offs to maximize your verifiable income, so it is best to start these conversations early. If you have been self-employed for less than two years, you may still be able to qualify for a mortgage, but your business must have existed for at least 12 consecutive months.

Anyone who has ever applied for a mortgage can tell you that lenders require a wide range of documentation. Borrowers without W-2s will need to be extra organized to provide all the necessary information to qualify. If you are self-employed or a freelancer interested in buying, I can help you find lenders who regularly work with self-employed borrowers, ensuring the process is as straightforward as possible.