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We Ask, You Answer: How do I qualify for a loan?
Susan asks: Question about freelancers who are single (or have a spouse who is also self-employed)… How do you show proof of employment so you can get approved for credit cards or a mortgage?
When my husband and I bought our first house in 2000, we had to get letters from a few of our editors stating that we worked for them and would likely get assignments from them in the future. We also had to give the mortgage company a copy of our income logs. But that’s the extent of my experience.
Renegade readers: How have you dealt with this situation? Please post in the Comments! Thanks much. [lf]
5 Responses to “We Ask, You Answer: How do I qualify for a loan?”
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Angela
Said this on February 4th, 2008 at 2:45pm:For a recent mortgage refinance, I used 2 years of tax returns as proof of income. They considered my yearly income to be the net income (after business expenses, but before taxes) on the schedule C of my most recent return. I also had to provide one month’s worth of bank statements. It was kind of nerve-wracking, but it didn’t seem to be too much of a problem.
Lisa Bakewell
Said this on February 4th, 2008 at 6:14pm:Angela is right. Generally a lender will want to see two years worth of tax returns and your most recent bank statements (sometimes six months worth) to verify that you’re on track to making the same amount or more money in the current year as a self-employed. The letters from editors or others that you are freelancing for are great, too, as mentioned.
Beth
Said this on February 5th, 2008 at 3:06pm:In the past I’ve dealt with two types of mortgages which might be helpful: 1)a paperless mortgage - if you’ve owned a home before and have excellent credit, all I had to do was provide the name of an employer that they could contact and confirm that I was working regularly and getting paid. 2) the other was a “no income check” mortgage, which meant that they didn’t look past your tax returns and didn’t verify your income. The rate was slightly higher on this one, but not by much.
For credit cards, I’m sure you can find a few compnaies who will start you out with conservative credit limits. If you use them and pay them off responsibly, they will raise your limit if asked.
Jen Miller
Said this on February 7th, 2008 at 9:46am:I second what Angela and Lisa said — I bought my house in May, and showed two years of tax returns as proof of income.
Valencia
Said this on February 7th, 2008 at 3:59pm:Likewise, I was able to get a mortgage with two year’s of tax returns and bank statements. Once this information was provided, the process was relatively simple.