Our real estate agents show Atlanta homes for sale to self-employed buyers all the time! Yes, the mortgage approval process is more stringent for people who are self-employed. But no, it's not impossible to achieve your goals. It just requires a little bit more preparation. Mortgage lenders take a wide variety of factors into account when making a decision. In the long run, their focus is on ensuring buyers are financially stable and can repay loans with no issue. Some of the key factors they look at include:

• Employment history
• Length of residence at current address
• Credit history
• Current debt
• Monthly income

Self-employed people have all of these things, naturally. However, some of the information might be harder to pull together and present in a way lenders are willing to accept. Likewise, they may have questions about long-term financial stability, depending on occupation.

Luckily, there are steps self-employed buyers can take to make things easier. Let's look at them now.

1. Consider Incorporating as a Small Business
   This might seem like a huge piece to start on, but it simplifies many transactions. If you've been self-employed for years and feel confident about your future in your industry, incorporating can be an excellent move. Not only does it "look" better, but it results in more detailed documentation of your finances, which is precisely what lenders are most concerned about.
   
   
2. Gather Your Tax and Income Information
   No matter how your business is structured, you no doubt file taxes every year. Borrowers in a conventional occupation usually submit two years of tax returns to lenders. As a self-employed person, try to gather 3-5 years' worth if you can. You should also submit separate proof of all income, which helps to demonstrate that your tax documents are accurate.
   
   
3. Develop Necessary Business Statements
   When working with self-employed borrowers, lenders often request they submit a formal profit and loss statement. A P&L statement lays out all of your business assets and liabilities for a given period, usually a quarter. You don't have to follow a special format; you can fill out a P&L template you find online. Develop a P&L for the last two quarters as soon as you can.
   
   
4. Choose the Right Lender
   In the long run, the differences self-employment bring shouldn't add too much complexity to the process. When you're comparing lenders, be sure you're dealing with a loan agent who knows how to work through loan generation for a self-employed client. Lenders establish their own criteria for most private loan programs, so steer clear of any lenders that seem likely to hassle you.
   
   
5. Get the Facts from the Source
   If you're self-employed, let your real estate agent know. He or she has probably worked with others in your situation and can help you decide which lender to approach. Once you make a choice, stay in close touch with your lender and ask plenty of questions. Honest, reputable lenders will be forthcoming about the steps you can take to make your loan a success.
   
   
6. Consider Submitting a Household Budget, Too
   You can submit many kinds of documentation in support of your loan application, so don't be afraid to think outside the box. A budget—including projected housing expenses—can show a lender that you've given serious thought to the future. Even if you're not rolling in dough, your dedication to spending responsibly can sway decisions in your favor.

No matter where or how you're employed, choosing a great real estate agent is the first step toward finding the home of your dreams. Contact us to discover more. We're here to help.