With so many brand new condos for sale, it can be very tempting for you to wonder about buying a home for yourself instead ofpaying rent every month. After all, condos are popping up everywhere and they may have spiffy services in the building like a gym and a swimming pool.
However, if you’re planning to get a mortgage then you have a bit of an issue. Part of what mortgage lenders look for in prospective clients is a steady paycheck that will assure them that you have the money to make your monthly payments.
But as a freelancer, you don’t have the work stubs to show the bank. You aren’t really sure of how much you’re going to earn every month and that’s worrisome for mortgage lenders.
Still, you can buy yourself a home even if you’re a freelancer. Do any or all of the following:
- Save plenty of money. The easiest way for you as a freelancer is if you have enough money in the bank to buy a house for cash outright. Of course, that will be very difficult, but having lots of money in a bank account can help impress your potential mortgage lenders. At least they know you’re the frugal sort and you have the money to make a huge down payment and to pay your bills.
So how much should you actually have in your bank account? The money should be enough to cover at least 20% of the price of the home for your down payment. You should then have enough left over for a 6-month emergency fundto cover the mortgage, your food and groceries, your utilities, and your health and home insurance.
- Pay off all your outstanding debts first. You can compensate for your lack of sure earnings by the fact that you don’t have any outstanding debts. That means you own your car outright, all your credit card balances are cleared, and even your student loans are paid up. Again, this demonstrates your ability to pay off debts. Mortgage lenders feel better if you have this credit payment history.
- Get a high credit score. This should be at least 750. The point of a credit score is to demonstrate your ability to pay off your debts, so a high score is a must if you’re a freelancer. This means eliminating your credit card balances and always paying your bills on time.
- Have a history of good earnings as a freelancer. Aside from a history of paying debts, you also have to show a history of good earnings as a freelancer. That’s why you should only consider buying a home if you have at least two good years to show lenders that you’re earning good money. If you’ve started as a freelancer only recently, then you have to wait first. The only sure way to get the money to buy the house is if your freelancer job gives you enough earnings to buy a house outright.
If you haven’t had enough time as a freelancer, then you can spend at least 2 years planning what kind of house or condo to getwhile tightening up your spending along the way. As a freelancer, you really ought to cut down on frivolous purchases if you’re serious about buying a house in the near future.
- Think about getting a mortgage broker. A broker can help lead you to mortgage lenders which deal frequently with freelancers, this can make things a lot easier for you.
As you can see, you can buy a house if you’re a freelancer. You just have to prove you’re not a risky proposition for lenders, then you can get the mortgage for the condo or home you want to buy.