These days, contract work is becoming more and more appealing to a wider variety of people. After all, working as a freelancer allows you total control of how much, when, and where you work. If you have the drive to make a real living through freelancing, then you may decide to make it your full-time job.
Although it comes with plenty of benefits, freelance work can have drawbacks as well, even when you’re successful. For example, although it probably won’t stop you from getting a home loan, it may make the process more complicated. Here are some tools from Falla Associates to make homeownership achievable as a freelancer:
Getting Your Finances in Order
Before you can apply for a mortgage, you need to prove you’re a good investment. Here’s how:
- Focus on building up to a livable income and maintaining that - or ideally, increasing it - over two or more years.
- Save up enough to make a 20% down payment in order to make yourself an attractive loan candidate.
- Consider forming an LLC in California to legally separate your personal and professional assets to protect your future home.
Prepare the Basics
You’ll need some basic information when applying for a home loan:
- Before you can start house hunting, you’ll need to get preapproved for your mortgage.
- Here’s a list of the documentation you’ll need to bring with you.
- Lenders need to run a credit check - here are some tips to avoid changing your credit score during the house hunting process.
Expect Pushback
Freelancers may need to jump through more hoops to get a mortgage than a traditional employee of a company.
- Remember that lenders need to feel confident that you’re able to pay the money back, and even established freelance income can be unpredictable.
- If you’re buying your home with someone else who has a traditional employment role, they may only be interested in lending relative to their income.
- You may need to try several banks before you find one with loan terms that will work for you.
- With years of experience and knowledge, award-winning Falla Associates can help you navigate the complexities of finding a mortgage.
Getting a mortgage as a freelancer can take more steps and more time, but it’s far from impossible. We hope this article gives you the tools you need to make this process less intimidating and more accessible so you can afford the home of your dreams.
Need help finding a home as a freelancer? Contact Falla Associates at
(415) 602-5768 and let’s team up!
