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How to Get Approved for a Mortgage as a Freelancer

| August 11, 2021

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How to Get Approved for a Mortgage as a Freelancer


Getting a mortgage as a freelancer isn’t as complicated as you may think. In fact, the application process for contract workers is fairly similar to that of traditional employees. The major difference is that banks tend to be hesitant about lending to people without stable employment. While you may feel secure in your freelancing job, proving this to money lenders will require some extra paperwork. Here are some tips and resources to help you get your mortgage application approved the first time!


Save for a Higher Down Payment

Putting more money down on your new home will reduce the amount you need to borrow from the bank. The lower the mortgage, the easier it will be to get your application approved.

  • Work with One Resource Financial Consultants to get your finances in order.
  • Structure your business as an LLC to save money on your taxes. You can form an LLC through an online formation service.
  • Optimize your household budget and tighten your spending to save money quickly.
  • Pick up a side gig to boost your income while building up your home-buying fund.


Know Your Numbers

Banks rely on a few key numbers to determine whether to loan money to a prospective home buyer. Check these numbers yourself so you can avoid nasty surprises!

  • Make sure your credit score is high enough for the type of loan you want.
  • Check your debt-to-income ratio and take steps to improve it.
  • Calculate the loan-to-value ratio for the house you want to buy, and consider whether you should expect additional costs, such as mortgage insurance.


Provide Two Years of Tax Returns

In lieu of pay stubs, many lenders require that freelancers and business owners provide tax returns from the past two years as proof of income.

  • Providing two years’ worth of tax returns will show that your business earns a reliable and steady income.
  • You may want to amend your past tax returns if you underreported business income or you took too many deductions.
  • Business owners should also be prepared to provide bank statements.
  • If you can’t provide two years of tax returns, consider applying for a no-doc mortgage.

Many freelancers have heard horror stories about trying to get a mortgage without a traditional job. But when you approach the process yourself, you’ll quickly learn that it’s not as challenging as it sounds. Planning ahead and getting all your paperwork in order will set you up for a positive mortgage application experience.


Financial planning is crucial in the years and months leading up to a home purchase. Contact One Resource Financial Consultants for help planning your big purchase. Call 260-478-0680.