- Traditional mortgages: Traditional mortgages are the most common type of mortgage. They are typically fixed-rate mortgages, which means that the interest rate will not change over the life of the loan.
- Adjustable-rate mortgages (ARMs): ARMs are mortgages that have an interest rate that can change over the life of the loan. ARMs typically have a lower initial interest rate than traditional mortgages, but the interest rate can increase over time.
- Government-backed loans: Government-backed loans are mortgages that are insured by the government. This makes them less risky for lenders, which can result in lower interest rates. There are two main types of government-backed loans: FHA loans and VA loans.
What are the different factors that lenders consider when approving a mortgage for a self-employed individual?
When approving a mortgage for a self-employed individual, lenders will consider a number of factors, including:
- Your income: Lenders will want to see proof of your income, such as tax returns, bank statements, and profit and loss statements.
- Your credit score: Your credit score is a measure of your creditworthiness. Lenders will use your credit score to determine your interest rate and loan terms.
- Your debt-to-income ratio: Your debt-to-income ratio is the amount of debt you have relative to your income. Lenders will use your debt-to-income ratio to determine how much you can afford to borrow.
- Your down payment: The amount of money you put down on a home will affect your interest rate and loan terms. Lenders typically require a down payment of at least 20%, but there are some programs available that allow for lower down payments.
How can I improve my chances of getting approved for a mortgage as a self-employed individual?
Views: 3
