Even without a single source of guaranteed income, home ownership remains an option for the self-employed. Here are a few tips on how to buy a house as a freelancer.
STEADY STREAM OF INCOME - Of course, it’s more difficult for a freelancer to achieve this as there’s no single source of consistent income. Your signed income statement and balance sheet, and a letter from your accountant will demonstrate to the bank whether your income and financial balance is sufficient.
GET PREQUALIFIED - This is all the more important when applying for a home loan as a freelancer, as you’ll know in advance whether your various sources of income are enough to get you the home you want.
CHECK YOUR CREDIT RECORD - Your credit score will play a primary role in determining whether you can get home loan approval. Check your credit score beforehand so you can get an idea of whether your freelance income stands you in good stead, and whether you have managed your finances responsibly.
SAVE UP FOR A DEPOSIT - A deposit usually amounts to 10% of the home price, but as a freelancer you may want to push that number up to at least 20%. A higher deposit will compensate for any additional risk the bank may attach to your freelance status.
PREPARE YOUR DOCUMENTS - As a freelancer there are a number of documents you should provide when applying for a home loan. Most of them can be provided by your accountant or bookkeeper. While you may have assumed the freelance lifestyle rendered a home purchase untenable, think again. We'll gladly assist you every step of the way!
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Margie, Clare, Fiona, Terry, Arlene, Brigitta & Jane