With the economy in its recent slump, getting a mortgage loan is not easy. For those people who work for themselves, it can seem almost impossible. The companies which loan money for mortgages need to see evidence of how much you make to be sure you can pay the monthly payments. Because of this, you may have to do a little more than most purchasers in order to give them what they need.
Going back a couple of years, collect your tax returns for starters. Still, even with this, a few institutions will hesitate to loan money. “Stated Income” or “No Doc” loans may be needed in these cases. Mortgages such as these were created with the self-employed in mind. They are designed to avoid the need for such strict proof of pay. Many mortgage lenders provide these kinds of loans.
A history of your credit can help tremendously when trying to obtain a loan on “No Report”. Be sure and have a look at your own credit report before applying for a loan. Check to make sure that there are no false records in it. Anything which is not truth should be straightened out first.
The score on your credit will have to be higher than average for this type of loan. Most times, six hundred is a nice number. With a ‘No Report” mortgage, you will need to be better than this. Many people will borrow a small amount of money in order to up their credit score, being sure to get it paid on time.
You will also need to save a large down payment before trying to get a mortgage. Most lenders will want around twenty percent of the total loan as a down payment. The larger the down payment is the better for you. This is because a higher down payment means a lower risk for the lender. Before you begin house hunting, it is a good idea to use a mortgage calculator so that you know how much house you can afford. You don’t want to fall in love with a house just to find out that it is out of your range. With mortgage calculators, you simply enter the amount of the mortgage you desire, and the interest rate. Do not apply for a mortgage which you cannot afford to pay off.