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For many people, buying a home in Chicago is a dream come true; but if you’re self-employed, it can be difficult to get approved for a mortgage. That’s why it’s important to do your research and understand the requirements for getting approved for a mortgage with your unique circumstances. Let’s take an in-depth look into what you need to know about obtaining a loan when you’re self-employed and living in Chicago.
Know Your Finances
The first step when buying a home is understanding your finances. It’s important to have a good handle on your income so that you can provide proof of funds when needed. As a self-employed person in Chicago, there are some special considerations that you need to keep in mind. For example, banks will want proof of your income from the past two years before they approve you for a loan. This means that having detailed records of your business income for the past two years is essential if you want to be approved for a mortgage. You should also keep records of any investments or assets that you have, as this will help bolster your financial profile and make it easier for banks to approve your loan application.
Find the Right Bank
The second step is finding the right bank or lender that can provide the best terms possible on your mortgage loan. There are many different banks and lenders available in Chicago, so it’s important to shop around and compare rates and fees before making any decisions. Additionally, some lenders might specialize in working with self-employed borrowers, and so they might be more open to working with them; so, make sure you do your research before settling on one lender over another.
Be Prepared to Make a Down Payment
Lastly, it’s important to remember that most lenders require at least a 20% down payment when purchasing a home; so even though you may not have perfect credit or all of the necessary paperwork upfront, having money saved up will help significantly when applying for a loan as a self-employed person living in Chicago. Furthermore, having money saved up also demonstrates financial responsibility, which helps convince lenders that lending money to you is not too risky of an investment on their part.
Buying a home in Chicago can be an exciting experience, but it’s important to understand what goes into getting approved for a loan when you’re self-employed. Knowing how much money you have flowing in and out of your accounts each month is essential if you want lenders to trust that loaning money to you is a smart idea. Additionally, shopping around for different banks and lenders can help ensure that you get the best terms possible on your mortgage loan. With these tips in mind, buying a home as a self-employed person should be much smoother sailing than expected!