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Tips for Buying a Home When You Are Self-Employed

August 20, 2020  |  Builder Info, Building Tips, Design Tips, DIY Tips, Hobbs NM Tips, Home Buying FAQ

So, you are self-employed and want to buy a home. Not a problem! House hunting is an exciting process. While finding the perfect French Brothers homes in Hobbs NM for sale is one step, securing a home loan is another. We want to make your homebuying process as stress free as possible, so here are some helpful hints to make qualifying for a mortgage easy!

1. Be organized – Organization is key to most things in life. This is especially true when it comes to buying a home. Keeping good records will help prepare you for meeting with a lender who usually will like to see the last 24 months of financial information. Financial records usually consist of tax returns, profit and loss statements, up-to-date balance sheet, proof your business is operational, and personal bank statements. You should also be able to show any assets you may have such as stocks, investments, retirement accounts, and your savings account. Keep your business and personal expenses separated.
2. Maintain a high credit score – Take a look at all three of your credit reports and fix any discrepancies you find. In assessing your financial profile, mortgage lenders will look at your debt-to-income ratio. Pay off any debts you have and try to lower the other ones as much as possible. It is important to not do anything that will hurt your profile including missing a payment or making a late payment. Avoid making big purchases as well. The goal is to have a higher credit score to qualify for a lower mortgage rate.
3. Have a larger down payment – A typical down payment on a home is 20 percent of what the house costs. A larger down payment may be needed for those who are self-employed. Talk with your lender to see what direction you should take.
4. Have a contingency fund – No matter your employment type, it is important to have a contingency fund. Make sure you are saving for emergencies in addition for your down payment. This can go to cover any additional costs that may be incurred or emergencies that may arise in your life. This can range from two to six months’ worth of savings.

We hope these tips will help make the home buying process a seamless process. And since you are in the market for a new home, we wanted to let you know about the array of quick move-in homes in Hobbs NM for sale by French Brothers. Contact us today at 1-800-691-4375 to learn about how you can own one of these homes.

This post was written by French Brothers.