If you’re a self-employed individual with additional income from these sources, you may wonder if you can include that income when applying for a home loan. The answer is yes! Including freelance work or side gig income can open up opportunities for self-employed individuals to qualify for a home loan. In this article, we’ll explore the process and benefits of including this type of income in your self-employed home loan application.
Documentation and Proof of Income:
When including freelance work or side gig income in your self-employed home loan application, proper documentation is crucial. Here are a few essential steps to follow:
- Maintain Detailed Records: Keep meticulous records of your freelance work or side gigs. This includes invoices, contracts, and any other relevant documentation that verifies your income.
- Bank Statements: Provide bank statements that show consistent deposits related to your freelance work or side gigs. This helps establish a pattern of income and enhances your credibility as a borrower.
- Tax Returns: Your personal tax returns should accurately reflect your freelance income or side gig earnings. Ensure that you report all income sources and provide supporting documentation when necessary.
Demonstrating Income Stability:
Lenders want to ensure that your income is stable and reliable. When including freelance work or side gig income, consider the following:
- Consistency: Show a consistent history of earning income from your freelance work or side gigs. Lenders typically look for a track record of at least two years to assess stability.
- Future Earnings Potential: If your freelance work or side gigs have the potential for future growth and income, provide projections or client contracts to showcase this potential. This can strengthen your case for loan approval.
