For the Self-Employed: Increase Your Chances of Getting Approved For a Loan

Applying for a loan onlineMortgage application can be challenging. It becomes even more difficult when you are self-employed. You will want your lender to trust that you will make the monthly payments consistently.

Before you shop mortgages in Salt Lake City, Altius Mortgage Group notes that you should understand your unique situation of self-employment. Lenders may consider you a less-than-ideal borrower. You are likely to receive higher interest rates. Lenders may also require a number of other qualifications to ensure that they can trust you with their money.

Get a High Credit Score

When you know you can afford the loan, however, you can dress yourself up to be more trustworthy to lenders. You can increase your credit score by paying off any outstanding debts you have to financial institutions. High credit, obviously, can make you an ideal borrower and give you access to lower interest rates.

Pay More Down

When you have the savings, you can put a higher down payment on the house you want. This way, your lender will see you less of a risk. At the same time, you build up equity faster and you keep your home.

Save Up Much in Reserve

Of course, your housing expenses, including the down payment, should be separate from your emergency funds. The more you have in reserve, the more lenders see that you can pay off the loan even when your work takes a turn for the worse. You can take this advice to complement the previous one.

Prepare the Documents

You can do many other things to become more attractive to lenders. As you apply, you may have to provide income tax documentation covering one year. You will need other documents as well, so you prepare them ahead of time.

Self-employment brings challenges to the mortgage application, but you can get the home of your dreams as long as you set yourself up right with lenders.