Applying for a Mortgage as a Freelancer/Contractor


Home Free: Applying for a Mortgage as a Freelancer/Contractor

When you’re a freelancer or working via contract, mortgages can appear more complicated than if you were in full-time employment. You’ll need to be organized when it comes to financial documentation, informed when it comes to credit score, and wise to the different types of loans.




As a contract employee, you’re required to provide proof of two years of self-employment and more information about your income. This can include the following:


     Correspondence/invoices that prove collaboration with existing clients.

     Evidence of insurance for your business.

     Personal tax returns (these may include W-2s) and any financial documents shared between you and your accountant.

     Monthly-issued bank statements that help lenders to verify funds for a down payment.




Much like standard applicants, freelancers will require a healthy credit score to secure the best mortgages. You may, however, face unique obstacles.


     If you mix personal and business finances, your personal credit score may be affected by work-related setbacks or expenses. Make sure that your accounts are separate.

     Unpaid taxes can result in a lien, which will appear on your credit impacting your ability to secure a mortgage.

     It can be worth forming a California Limited Liability Company (LLC) as this can provide tax advantages and help protect your personal credit.




There are many different types of mortgage – some of these may favor a freelancer over others.


     If you have a solid credit score and two years of tax returns, a conventional loan may serve you best.

     Alternatively, the Federal Housing Association (FHA) can help you to secure loans with lower down payments and choose between fixed or market fluctuating interest rates.

     If there are no suitable mortgages for your desired property, as some, like Newport Beach, can be quite costly, it may be worth looking into different markets.


Freelancers and contractors are at no disadvantage when it comes to applying for a mortgage, but their ability to secure good rates is somewhat reliant on their diligence when it comes to correct administration and filing tax. Make sure you stay on top of the paperwork if you’re hoping to own a home in the next few years.


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