How to Buy a Home in Today’s Gig Economy

With a rise in flexible, temporary jobs, today’s “gig” economy is thriving. Many people are working second or side jobs, or may even focus their careers solely around freelance, self-employed, and independent contractor work. This shift in our workforce means changes for the real estate market as well. If you’re juggling different types of careers, homeownership is still within reach. Here are some ways to make it happen!

Start gathering your documentation

Your mortgage lender will request documents to verify your assets and income – so be prepared to share tax returns and bank statements from the past several years. You may also have to provide profit and loss statements, business license information, and more. Lenders typically request more information from freelancers or independent contractors because they must verify that you have the income and assets to buy the house and continue to afford home payments.

Slow down on tax write-offs*

Many lenders analyze your income after tax write-offs, so you don’t want your income to look lower than it actually is. You want to show the lender that you have the income to afford a home, so anything you can do to boost your income is important. You may want to talk with your tax advisor about your write-off strategy and how to put yourself in the best position for homeownership.

Save for your down payment

Down payment requirements vary based on your loan type, but having a large down payment amount saved can make your application more attractive to lenders. Having a sizeable down payment will also open up the loan options you qualify for, which can help you get a more favorable mortgage. When you talk to your loan officer, ask specifically about options for home buyers with similar employment histories – loan programs with flexible qualification requirements are becoming more popular.

Check your credit

Credit is a crucial part of the mortgage process for any home buyer – not just for freelancers. Keep track of your credit and take steps to increase your score. Examples of steps you can take include: paying your bills on time, maintaining a low balance on credit cards and other revolving credit, paying down debt, refraining from opening new credit accounts (unless you absolutely need to), and disputing any inaccuracies on your credit report.

The mortgage industry is evolving based on the changes in the way we work, which means more opportunities for home buyers. If you want more information on your home options, start a conversation with us today.