You’ve decided you’re ready to purchase a home, now it’s time to apply for a mortgage. Starting the loan application process can be overwhelming, but even more so for borrowers who are self–employed.
Thanks to smart phones, digital apps and companies like Uber and Airbnb, an increasing number of Americans, particularly millennials, earn their living in the sharing or gig economy by providing on–demand services. These people mostly work for themselves and are expanding the nation's already sizable self–employed workforce. And like salaried employees, on–demand workers want to buy homes.
Unfortunately, many self–employed individuals hear from family and friends that it’s challenging to get a mortgage because it’s hard for lenders to calculate your income. However, there’s good news. If you’re self–employed and your lender works with Freddie Mac, they now have the ability to submit your loan through Loan Product Advisor®, our automated underwriting system which is now integrated with LoanBeam. This integration gives you and your lender several advantages, including an automated review of the accuracy of qualifying income, eliminating the need to chase down unnecessary documents that support residual/excess income.
Whether you’re self–employed or not, lenders will evaluate the “four Cs” when deciding to make a loan:
Our collaboration with LoanBeam is just one example of a broader effort underway at Freddie Mac to build a better housing finance system and help lenders meet the unique needs of all borrowers.
For more information on the homebuying process, visit My Home by Freddie Mac.