Buying Real-Estate When You Are Newly Self-Employed

For those who are newly self-employed, purchasing real estate, such as a new home, can present significant challenges, especially if they have been self-employed for less than two years. Even with little debt, excellent credit, and the ability to pay a considerable cash down payment, it is often difficult for the newly self-employed to secure a real estate purchase loan at a fair rate of interest.

Without at least two years of tax returns to show a creditor, one option would be to go for a no-doc loan (which is a loan granted without supplying income documentation). However, no-doc loans carry a substantially higher interest rate than other real estate loans. If you do go this route, be sure you get a loan with no closing costs as after a couple years, with the appropriate tax returns, you should be able to get a new loan with better interest rates.

If your business is extremely successful, you might be able to get a real estate loan with just one year of returns to show. Especially if your income for the year up to the date you apply for the real estate loan looks like it will match the prior year, creditors might be willing to take a risk on you.

A final option is to apply for a real estate loan from a local lender within your area that is willing to service the loan and take a chance.

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