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How To Get a Mortgage If You Are a Gig Worker

Published:
July 13, 2021
Last updated:
November 24, 2021
Getting a Mortgage While Self-Employed
In This Article

As more and more people opt for gig employment or to be self-employed, many are finding themselves asking how can I get a mortgage or approved for a home loan. Thus, in this article, we’ll go over how to get a mortgage if you are a gig worker, as well as provide beneficial tips to ensure the entire process runs smoothly.

The freelancer and gig economy has been booming for quite some time now. Clearly, there are a number of benefits that come with being a gig worker, such as making your own schedule and overall flexibility. Nevertheless, this freedom often comes at a price—a lack of financial stability. Not only can financial instability make it more difficult to budget and save money, but it can also make qualifying for a mortgage or a self-employed home loan more challenging.

But be that as it may, if you are a gig worker contemplating a home purchase, even without a predictable paycheck, you can still get approved for a mortgage. In this instance, you will likely just need to provide additional information to get approved. That said, keep reading for a how-to guide and our top tips for securing a mortgage while self-employed.

How Can a Gig Worker Get Approved For A Mortgage?

In many ways, getting approved for a mortgage loan as a gig worker is no different than if you possessed a different job title. That said, there are some slight modifications in the overall process that gig workers should keep in mind.

First and foremost, you should check your credit to ensure nothing is amiss and correct any errors that could negatively impact your credit score. Once you have a better idea of your credit score and have fixed any mistakes on your credit report, your next step should be getting your finances in order and compiling the necessary documentation.

Of course, here, you will need to share at least two years of tax returns, which is unique to those in the gig economy. Providing your tax returns shows that your income will stay consistent in the future and that you can make your mortgage payments. And when it comes to your returns, be aware of how deductions are viewed. If you claim a lot of deductions to reduce your taxable income (such as deductions on work supplies, etc.), lenders could view it as a disadvantage. It is also beneficial to know what forms you need, including W-2s, 1099s, bank statements, 1040 tax returns, profit and loss statements, business bank statements (if applicable), and any additional payments or sources of income, including disability or Social Security, etc., ahead of time.

What’s more, you should start saving up for your down payment if you have not already. Note, if you want to prove your mettle as a reliable borrower, then you may want to consider saving more than the required down payment amount.

More importantly, you should make it a point to get pre-approved. As a gig worker, getting pre-approved might even be more vital since it is essentially a guarantee from your lender that you are eligible to borrow a certain amount of money at a certain interest rate.

In addition to getting prepared for the mortgage and home buying process in the above-mentioned ways, just like any other borrower, you should check out the best mortgage rates and research local lenders or mortgage companies. Doing your research beforehand and based on your qualifications will help to ensure that you are getting the best possible interest rate. That said, after you have done your due diligence and are properly prepared for the mortgage and home buying process, the rest is fairly standard—pick a lender, get pre-approved, apply for a mortgage, and search for the perfect home. Once you have found the home of your dreams, all that is left to do is make an offer, finalize your loan, order any inspections or appraisals, get homeowners insurance, and get ready to close on your new home.

What Additional Steps Does a Gig Worker Need To Take To Get a Home Loan?

As briefly mentioned, there is really only one extra step for mortgages for the self employed–provide extra documentation in order to present a clearer picture of their income. And the good news here is that, as even more people become a part of the gig economy, lending institutions have become more amenable. In fact, many lenders or mortgage companies offer alternative and low-document programs for gig workers, freelancers, and the self-employed.

Are There Any Tips To Keep In Mind When Applying For a Mortgage As A Gig Worker?

Overall, there are a few tips to keep in mind when applying for a mortgage as a gig worker, and they are as follows:

  • Be prepared to offer up proof of income
  • Make sure your credit is solid
  • Save for a sizable down payment
  • Know what you can afford

Ultimately, getting a mortgage as a gig worker requires a little extra documentation, but it is certainly not impossible. Plus, once you are able to buy a place of your own, you may be eligible for a generous home office deduction if you do your job primarily out of the house. That could result in some serious tax savings that would make owning your home more affordable.

Today’s Mortgage Rates

Ready to Apply For a Home?

Are you curious about a self employed mortgage, or are you ready to apply for one to buy a home? If so, Sammamish Mortgage can help. We are a local mortgage company from Bellevue, Washington, serving the entire state, as well as Oregon, Idaho, and Colorado. We offer many mortgage programs to buyers all over the Pacific Northwest and have been doing so since 1992. Contact us today with any questions you have about mortgages.

Get an Instant Mortgage Rate Quote Today

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