The task to obtain a mortgage can be daunting, especially for those who are in business for themselves.  Especially in this economy, lenders need to feel just as confident in their investment as buyers do, so proof of stable income is a task hard to prove when it comes to the self-employed.  However, all hope isn’t lost.  There are still self-employed buyers obtaining mortgages.  Here are a few tips to boost your chances of getting a loan.

The older the business, the better the chance you will have to get a loan quickly.  If the business hasn’t been around for at least two years, getting a mortgage might prove difficult.  In the past, borrowers could depend on stated income mortgages – loans given without tax documents or bank records to verify income.  Now, lenders want proof of stability before they will lend to any Self-employed borrower.  According to the Mortgage Bankers Association, lenders now look at documentation for income patterns to see how the borrower will be able to handle making payments over a long period of time.  In order to make sure you don’t have issues, you must document every penny you make.  Every bank is different, so be sure you find out what their requirements are before formally applying for a loan.

You both will make a better impression in person.  When you are ready to apply for the loan, go to the bank to speak to the loan officer who specializes in Self-Employed loans.  A specialist will be able to listen to your situation and offer advice on what loan would be best.  Doing your own research might point you in a good direction, but a specialist can usually offer something better.  There are varieties of loan packages to assure you can qualify for at least one.

Stock up your bank account.  Being self-employed will often cause a fluctuation of income levels depending on volume for the particular product you are selling.  Lenders will look mostly at your income levels from fat to lean, making sure you will be able to handle your mortgage in times of downturn, so make sure your bank account and reserve savings accounts have plenty of money to handle mortgage payments.  Most mortgage companies recommend a year’s worth.

Obviously, buying a home is something that one must prepare for, so do not rush into this purchase.  It is, after all an investment, not only for you but for the mortgage lender.  Self-employed borrowers have to be prepared from initial meeting to closing day and beyond.