Are you a self-employed individual looking to apply for a loan and don’t know where to start? Worry no more because we will discuss how to apply for a self-employed mortgage loan today.
Check Your Credit Score
If you are self-employed, you require a good credit score to obtain a personal loan. You can check your credit score for free online or through your credit card provider. When applying for a personal loan, aim for a credit score of at least 620. A credit score over 720 will yield the lowest interest rates.
Gather the Required Documentation and Information
Personal loans for self-employed people require more paperwork because your income is inconsistent. It’s always a good idea to round up this paperwork to ensure a smooth application process with your lender. Each lender has different personal loan requirements you’ll need to submit. But these are the most common documents:
Bank Statement
Your lender may require you to provide a bank statement. Bank statements provide a snapshot of your assets. They help your lenders have documentation that can tell them about the consistency of your income and your credit history.
Tax Returns
Lenders might also ask you for a copy of your tax returns because it provides them with detailed information on your income over a long period. Mostly, they will ask for at least two years of signed tax returns. However, they stress less on tax returns if you have a good credit score.
The Schedule C
You will be asked for this document if you are a sole proprietor or single-member LLC. This document shows the profit or loss of your sole proprietorship or LLC. This document helps lenders know your business’s cash flow and how much you earn.
1099-MISC Form
This document is required for all independent contractors and providers of legal and medical services who have given and received a payment of $600. It helps lenders determine the amount and consistency of your income.
Shop Around and Prequalify with Multiple Lenders
You will have to shop around for multiple lenders since they differ greatly in their personal loan policies. Some lenders offer a prequalification that lets you see whether they are likely to approve your loan and what terms you may qualify for before submitting your application.
Choose a Lender That Fits Your Needs
After prequalifying with several lenders, compare the rates and terms you can receive. This process allows you to select the best personal loan for your specific situation.
After selecting the lender, apply for the self-employed mortgage loan and wait for the approval.
In conclusion, those are the steps you can use to apply for a personal loan. These steps will make the loan application process seamless.
Are you looking to apply for a self-employed mortgage loan? Talk to us here at Blake Mortgage. We offer self-employed mortgage loans that allow you to get the finances you need for a home without the traditional income documentation that a conventional loan requires. Give us a call today, and let’s discuss your loan requirements!