My First Car Loan

You'll likely spend more money buying a house than anything else. Yet, owning a home is a dream most people have. Unfortunately, you'll face some challenges getting a loan if you're self-employed. The primary challenge is proving your income. While getting a loan might be more challenging, it's not impossible — it might just take some extra work. Here are some tips to help you if you're in this position.

Talk to a mortgage broker

A mortgage broker works for two groups of people. First, they work for consumers who want mortgages to buy homes. Secondly, they work for lenders who want to issue mortgage loans. Their primary objective is to find lenders for borrowers. A mortgage broker can help almost anyone find a loan, including self-employed individuals. Working with a broker is beneficial, as they have connections with many lenders. Therefore, you can apply for a loan with a broker and access many lenders. As a result, there is a better chance you'll find a loan by working with a broker. This is because banks only offer in-house loans in most cases, which means you either qualify or you don't.

Gather information to prove your income

Next, you need proof that you have a steady income to use for repaying the loan. Self-employed individuals don't have pay stubs, so you must find other ways to prove your income. You can do this in several ways, including with your bank statements. You can also use statements from your business that show your profits, and most self-employed people also use their tax returns to prove their income.

Make sure you have a few things in place

Additionally, you can do a few things that will make the process easier. The first thing you can do is improve your credit. If you have a great credit score, lenders are more willing to give you loans. If your credit score is less than 700, find ways to increase it before applying for a loan.

Next, work on your down payment. Again, lenders are more willing to issue loans when people offer large down payments. You should try to offer at least 20 percent down to simply the process and ensure you can get a loan.

Choose the best loan

A mortgage broker can find you a loan if you're self-employed. They might even find multiple loan options, allowing you to choose the best one. Get started today by contacting a mortgage broker in your city.