Self-Employed? Here’s How to Qualify for a Mortgage!

When you work for yourself, the financials of owning a business can be
complicated. Really complicated. For example, getting approved for a mortgage as a solo act requires a little more work on your part. Fortunately, you can prepare for this so you can navigate the mortgaging waters with a bit more ease. Consider this your checklist.

This may be old news to some, but new to others! Register and license your
business. You can register as a LLC (Limited Liability Company) or a DBA
(Doing Business As). Note: With DBA, you need to have two months of recent
business account statements—or creditor statements/invoices—to prove you’re self-employed.

Speaking of proof, it’s always a smart move to keep good records with programs like QuickBooks. This way, you’ll always have the files and information lenders need. Here are a few things you can provide to verify your business:

  • Current statement of bond insurance (the policy must be at least two years old)
  • A letter from your licensed CPA, enrolled agent, or tax preparer
  • Letters from clients indicating service(s) has been performed
  • A membership letter from a professional organization that can verify through your membership at least two years of self-employment
  • Any state license and business license that may be required in your profession
  • Evidence of workers’ compensation and employer’s liability insurance
  • A DBA (Doing Business As) issued at least two years ago

If you haven’t already, separate your business and personal accounts. Why? You’ll be able to better prove the income your business has garnered. Lenders average your last two years’ income to make sure you’re on track to make what you made the year before (or more).

You may also have to fill out IRS Form 4506-T, which gives the lender permission to request your tax records from the IRS. The best option, however, is to call a professional to make sure you do all that you need to. That way, you won’t waste time back tracking. Schedule a quick consultation with Rick today and see what you need to round up in order to take the next step for your business.

Go forth and conquer!

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