How to Get a Mortgage as a Contractor

If you`re a contractor in need of a mortgage, the process can seem daunting. As a non-traditional employee, there are specific steps you can take to increase your chances of securing a mortgage.

Here are some tips on how to get a mortgage as a contractor:

1. Build up your savings: Having a sizeable savings account can help you qualify for a mortgage as a contractor. Lenders typically want to see that you have enough money saved up to cover several months` worth of mortgage payments in case of income interruption.

2. Be prepared to prove your income: Unlike traditional employees, contractors don`t typically have a steady paycheck. As such, it`s important to be able to show lenders your income over several years. Provide them with tax returns and other financial documents to prove your income.

3. Consider working with a mortgage broker: Mortgage brokers specialize in helping individuals who don`t fit the mold of traditional employees find financing for a home. They can help you navigate the process and find lenders that are more open to working with contractors.

4. Improve your credit score: A good credit score is essential when applying for a mortgage. Pay down any existing debt, keep your credit card balances low, and make sure to pay your bills on time to improve your credit score.

5. Choose a lender that specializes in working with contractors: Some lenders are more experienced in working with non-traditional employees than others. Research different lenders and choose one that has a track record of working with contractors.

6. Make a larger down payment: If possible, aim to make a larger down payment on your home. This can help reduce the risk for lenders and increase your chances of getting approved for a mortgage.

7. Be patient: The mortgage application process can take longer for contractors than traditional employees. Be patient and stay organized throughout the process to increase your chances of success.

In summary, securing a mortgage as a contractor may require a bit more work than it does for traditional employees. However, by being prepared to prove your income, working with a mortgage broker, improving your credit score, and choosing the right lender, you can increase your chances of success.