Why is it so difficult for the self-employed to get a good loan?
Many self-employed people have a low credit score (below 680). And most traditional lenders, like banks, do not see past a low credit score even though there are many other loan criteria.
How do I get a good loan from a traditional lender, like a bank, if I have a low credit score?
You, the applicant, must help the lender understand the reasons behind a low score, and convince the lender that you are a reliable person with a reliable income. Or you have to find a different lender.
Some months I make great money and other months I make much less. What can I show a lender to prove that I am a good loan candidate?
In spite of a lower average credit score, most self-employed people actually earn 81% more than other loan applicants. Most lenders take a 24 month-average to determine your income level. That means, even if you had a great year last year with a high, consistent income level this year, those numbers from two years ago will still affect your loan application. But the loan experts at MortgagesForSelfEmployed.com can help you get that requirement down to 1 year – it’s not a trick, it just takes understanding the loan assessment process.
What if I’ve been rejected for a loan in the past?
That is fine, we can review the materials from your previous loan application and give you an honest re-assessment for free. We can also recommend a number of ways to improve your application for the next time. We can talk you through the process of improving your application and adding materials that will fill in the gaps and caused the rejection of your previous application.
What are some of the ways we can improve my chances for a successful loan application?
There are a number of insider factors that can help us strengthen your loan application. To name just a few, there is the type of property that you are attempting to purchase – for instance, a single family home is easier to buy than a condominium. If you’ve tried to purchase a condo in the past, and been rejected, maybe it’s time to look at single family homes. The loan amount is also important, and not just for the obvious reasons – loans under $417,000 are normally provided through Fannie Mae and Freddie Mac, which can make a loan more difficult to get. So there are actually times when a more expensive home is easier to purchase. Strange but true. There are many other surprising details like this, which can help you attain a loan and become a property owner. Please don’t hesitate to contact us for a free consultation with one of our loan experts. We’re happy to help so that your dream of owning your own business never gets in the way of your dream to own your own home.
Do you have mortgage questions? Are you self-employed? Contact us and we will answer your questions immediately.