When you are self employed and applying for a mortgage, you go through the same vetting process as everyone else. However, it is much more difficult to convince your mortgage lender that you have the financial security and employment history needed to get your loan approved. When it comes to Atlanta mortgage for the self employed, qualifying can be a challenging hurdle to overcome. The mortgage lenders at BrightPath will use their industry knowledge and comprehensive experience to secure the loan that best suits your needs.
How Applying for a Mortgage is Different When You Are Self Employed
When seeking Atlanta mortgage for the self employed, proving your fiscal worthiness is a much more arduous undertaking than it is for those who work for corporations. Without years of W-2s to give to your mortgage lender, you will have to provide additional paperwork that shows your ability to generate future income. As a result, it is crucial that you keep detailed records of your finances before applying for your mortgage.
Documents to Prepare for Your Mortgage Lenders
Atlanta mortgage for the self employed requires an employment history of at least two years to demonstrate that you have earned steady and uninterrupted income. Your mortgage lender will request the following documents to ensure you are a desirable candidate for your loan.
- Profit and loss forms. These statements summarize the cost, revenue and expenses your business has incurred over time. These can include Form 1120S, K-1 or Schedule C documents.
- Personal tax returns. If you do receive W-2s, be sure to include them in your mortgage application.
- Business or state licenses. These licenses are key to legitimizing your business in the eyes of your mortgage lender.
- Doing Business As (DBA). In certain situations, the operating name of your business may differ from its registered, legal name. If this is the case for you, it is necessary to provide your DBA in your loan application.
- Proof of business insurance. Depending on the type of business you run, this can include credit, liability and life insurance forms.
- Document from a certified personal accountant (CPA). This helps to ensure the validity of your business and tax write-offs.
- Client correspondence. Letters or emails from current clients can go a long way in promoting your candidacy to your mortgage lender.
What Mortgage Lenders Look For
Just like with regular applicants, Atlanta mortgage for the self employed requires a good credit score. Mortgage lenders use this as a barometer to judge if you are capable of repaying debt. They also review your credit utilization ratio. The lower the ratio, the more favorable your loan application.
Mortgage lenders will factor your debt-to-income ratio (DTI) into your application as well. This is the amount of monthly income you put towards paying off your debt. A lower DTI signifies that you have the budget needed to pay the interest on your loan. As a result, if your debt-to-income ratio is higher than 50%, you will need to pay off some of your existing debt before applying for your mortgage.
Atlanta Mortgage for the Self Employed Has Never Been Easier with BrightPath
Submitting a loan application when you are self employed can be an involved and intricate task. The mortgage lenders at BrightPath will work with you to provide clarity and direction throughout the entire process. Contact us today to schedule your free consultation.
When you work with BrightPath, you are guaranteed to get on the path to a brighter future.