05/14/2021
In the late 2000s, there was a mortgage crisis that has led to stricter requirements for business owners to obtain a mortgage. Now it’s more than your credit. Here are some tips that will help small business owners like yourself obtain a mortgage:
✅ Plan in advance- The process of obtaining a loan for a small business owner is very similar to a W-2 employee. The challenge lies with proving income for your business. Small business owners are required to show 1099 forms and a profit and loss balance sheet. Hiring a bookkeeper is not a bad idea when going this route.
✅ Show year-over-year income consistency- Underwriters have to make sure that the income from your small business is a reliable source of income. Showing your credit is only part of the game.
✅ Tax Deductions - When owning your own business, it’s great that you can write off tax deductions, but they can come back to haunt you when looking for a mortgage because the underwriter examines your tax deductions and your income can appear to be smaller. 'The more money you make the better.
✅ Improve your credit score- A lot of people nowadays achieve great credit, but this is especially important for the small business owner is that other requirements have to be met to obtain a mortgage loan.
✅ Bigger down payment - A large down payment will put you in a great place when applying for a mortgage loan. This shows that you are stable with our finances. Usually, you would want to put up at least 50% of the price. This may seem unreasonable, but try to get at least close to that.
Are you a small business owner seeking to buy a house? What tips appeal to you the most?
