Mortgage Planning for Freelancers: Overcoming Approval Challenges


As the gig economy continues to grow, more and more individuals are choosing to become self-employed or freelancers. While there are many benefits to this type of work, one of the biggest challenges they face is obtaining a mortgage. With a traditional 9-5 job, lenders have a clear understanding of the borrower’s income and stable employment. However, with freelancers, their income and work stability can fluctuate, making it difficult for them to get mortgage approval. In this article, we will discuss the challenges freelancers face when trying to get a mortgage and how to overcome them with effective mortgage planning.

The Challenges

Lenders have strict guidelines and criteria for mortgage approval, and these can be even more challenging for freelancers. One of the biggest hurdles is proving a stable and reliable income. Unlike traditional employees who receive a steady paycheck, freelancers have irregular income streams, making it difficult for lenders to determine their ability to repay the mortgage.

Another challenge freelancers face is a lack of traditional employment documentation. Lenders typically require pay stubs and W2s as proof of income and employment, but freelancers often have none. Instead, they have invoices, contracts, and 1099 forms, which may not be enough evidence for lenders to feel confident about their financial stability.

The last major hurdle for freelancers in obtaining a mortgage is their tax returns. Many freelancers take advantage of tax write-offs, such as business expenses, which can decrease their taxable income. This can cause a significant decrease in the qualifying income for a mortgage, making it challenging to meet the lender’s requirements.

Overcoming the Challenges

While it may seem daunting, there are effective ways for freelancers to overcome these challenges and increase their chances of getting mortgage approval.

1. Keep Detailed Records

One of the key ways for freelancers to overcome mortgage approval challenges is by keeping detailed and organized records of their income and expenses. This includes all invoices, contracts, and 1099 forms, providing proof of regular income. It is also important to keep track of all business expenses to determine the actual taxable income, which is used to calculate the qualifying income for a mortgage.

2. Show a Consistent Income

Freelancers can also demonstrate a steady and consistent income by providing multiple years of tax returns and invoices. This can show lenders that the freelancers have a stable and reliable income over a period, making them a less risky borrower.

3. Build a Strong Credit Score

A strong credit score is crucial for any mortgage application, and this is no different for freelancers. Lenders often look at credit scores to determine if the borrower is responsible and capable of repaying the mortgage. Freelancers should focus on maintaining a good credit score by paying bills on time, keeping debt levels low, and avoiding opening new lines of credit.

4. Consider a Joint Application

If a freelancer’s income is not sufficient to meet the lender’s requirements, they may want to consider a joint application with a spouse, partner, or co-borrower. This can help increase the income and strengthen the overall application, making it more likely to be approved.

5. Consult with a Mortgage Broker

Partnering with a mortgage broker can be beneficial for freelancers as they specialize in finding loans for self-employed individuals. They have access to a wide range of lenders and can help freelancers navigate the complex mortgage market. Mortgage brokers also have experience working with unconventional borrowers and can provide valuable advice and guidance on building a strong application.


Despite the challenges, freelancers can obtain a mortgage with proper planning and preparation. Keeping detailed financial records, showing a consistent income, maintaining a strong credit score, and seeking assistance from a mortgage broker are all effective ways for freelancers to overcome approval challenges. By taking the time to plan and present a strong financial case, freelancers can increase their chances of getting mortgage approval and achieving their dream of homeownership.

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