How Does a Broke Writer Get a Mortgage?

Summary

The article provides advice for freelance writers on how to prepare for qualifying for a mortgage.

Abstract

The article is titled "How Does a Broke Writer Get a Mortgage?" and provides tips for freelance writers who are looking to buy a home and qualify for a mortgage. The author suggests scheduling an appointment with a loan officer to check credit, working with a CPA to position oneself for homeownership, understanding tax returns, and keeping a monthly profit and loss statement. The author also emphasizes the importance of saving for a down payment and closing costs.

Opinions

The author believes that freelance writers can qualify for a mortgage with some planning.
The author suggests that freelance writers should work with a CPA to position themselves for homeownership.
The author emphasizes the importance of understanding tax returns and keeping a monthly profit and loss statement.
The author recommends saving for a down payment and closing costs.
The author suggests that freelance writers should not be discouraged by their current financial situation.

Some Day You Might Have to Leave the Coffee Shop and Own a Home

If you’re a freelance anything and single, you’re probably renting an apartment and broke.

That might be fine with you and fit perfectly with where you are in life right now. When I was in my 20’s I was ok with being broke (I didn’t even really know that I was), and living in an apartment.

Someday I would like to return to the equivalent of apartment living. I’m not handy and I don’t have time to become handy. Right now with a family that won’t work. Suburbia beckons.

You may be wondering if you will ever be able to buy a house someday and qualify for a mortgage. Some of your friends probably work salaried jobs and own houses right now.

I have good news: you can too, it just takes some planning. It doesn’t have to be complicated. Here are some things you can do to prepare for qualifying for a mortgage:

Schedule an appointment with a Loan Officer so you can have your credit checked to see where you stand.

2. Hopefully, you have a good CPA. Tell them you want to position yourself to buy a home in the near future.

3. Understand your tax returns. Freelancers are “Sole Proprietors”. This means that all of your income and expenses get reported on a “Schedule C”. We will need to see your last two years of tax returns in order to calculate your income.

4. Look at Schedule C below. The number that we use to calculate your income is line 31: net income. We will divide that number by twelve to determine the monthly income that we can use.

Photo by Author

4. Begin to keep a monthly Profit and Loss Statement. This doesn’t have to be anything complicated. You just need to track your monthly income and expenses. Basically, a Schedule C is a glorified Profit and Loss statement.

5. Save, save, save for your down payment and closing costs. I tell my borrowers to do some research on the sales prices for the types of homes they are interested in and then multiply that price by 7%. For example, for a $300k home, you will need around $21k.

Again, it just takes a little bit of planning to get ahead of the game. Even though you’re broke now, you might not always be.