Ways to Get a Mortgage in the U.S.

Before the credit crunch in 2007, banks would hand out huge mortgages to anyone, even to those with no savings. Self-employed workers who have no evidence of income could go directly to the financial establishment, and acquire a quick loan just by simply telling what they earned. This loan process was known as self-certification mortgage.

Then, the recession began. The shortage in mortgage funding and continuing weakness of the economy, along with the abuse of the loose lending system, led to self-cert mortgages being banned. Today, there are no self-cert mortgages available in the country, and banks are much more cautious when it comes to screening and lending, making it hard for borrowers, particularly for self-employed, to get a home loan. But of course, just because it’s hard doesn’t mean it’s already impossible. There are a lot of ways to apply for a mortgage loan and increase your chance of getting approved even if you’re a self-employed, here’s how:

 

ways to get mortgage

 

 

  1. Improve your credit rating. One of the first key things to do when considering applying for a loan is to ensure that your credit file is in good standing. Lenders will want to confirm that you’re a good risk by checking your credit file before lending you any amount. So, if you have debts or bills due, make sure you pay them on time.
  1. Hire your own accountant. Lenders want to know that they’ll get back the money they lend out. So, it’s very important that you provide something that will prove that you will be able to pay off the amount you’re borrowing– and hiring an accountant is one of the best solutions. This doesn’t mean, of course, that you need to employ a full-time accountant; if you’re a self-employed, you just need a couple of hours of their time to help you. Hiring an accountant will make it clear that you’re serious about the process. In addition, your accountant can also help you understand the process more, and help you choose which loan suits you.
  1. Pay off your debts. Do not miss any bills, credit card, or other loan payments. This will reflect on your credit report, which is a crucial document when applying for a loan. Remember, lenders are likely to check all your financial reports – from your income records to credit card files – to determine if you’re worthy to be approved for a loan.
  1. Save, save, save. Banks are more cautious these days. In fact, most of them require you to have a deposit worth of 10% of the purchase price of the property before they’ll even consider you. So if you’re buying a house for $100,000, you need to put down at least $10,000. And if you want better deals, some of them will insist for higher deposits. Of course, this is not to mention the amount that you should pay for property taxes, home insurance, home inspection, and many others. So it’s really crucial to ensure that you have enough cash to cover all your mortgage cost.
  1. Talk to several lenders. Not all senders offer the same kinds of loan, so it’s crucial to shop around and do your homework. It is also helpful to get some help from a professional to determine which of the banks’ terms and interest rates are better for you.
  1. Get your documents in order. There’s a great chance that you’ll get the loan that you want if you keep all the necessary paperwork in order. These documents will be your proof that you can repay the amount that you’re borrowing. The typical things that lenders will likely to check are your tax return, bank statements, proof of address, and any documents that verify your source of income