Buying a home can be a long and challenging process. As a small business owner, it can be even more challenging because banks often perceive business owners to be riskier than traditionally employed people and it’s much harder to prove the stability of income. We asked the experts to share their home buying tips for business owners to help make the process easier.
The following are 13 home buying tips for business owners:
1. Declare Your Income Accurately
2. Meet Up With Your Banker Personally
3. Consider a Fannie Mae Loan Option
4. Invest a Higher Down Payment
5. Check Your State’s Bond Programs for Down Payment Assistance
6. Find a Place That Allows You to Work From Home
7. Wait Until You’re at Least Two Years in Business
8. Find a Place With Access to Local Hubs
9. Buy a Home That Won’t Require Much of Your Time
10. Know How Much of the Company You Own
11. Set Aside Money for Closing Costs
12. Build Good Credit First
13. Document Business & Personal Income
Bottom Line – Home Buying Tips for Business Owners
As a small business owner, you’ll find it more challenging to buy a home because it’s more difficult to secure a mortgage. Lenders typically want to see stable income. However, unlike W-2 employees, it’s tougher for small business owners to show this. Use the above business owner first home buying tips as a guide to help you with your home-buying process.
Jason Owen
I have a Handyman business and do light remodeling (w/ employees). I’m also employed through Georgia Pacific. I’ve been in business just over 2 years and with GP almost 6 months. I make to much for a USDA loan (total household), But in qualifying for a conventional loan my two incomes aren’t recognized until two years doing both… Any suggestions to get approved for the homes catching my eye and not the homes inside of just my GP wages?
Allison Bethell
Hi Jason:
I would look into an investment property loan from an online lender or a hard money loan. A hard money loan is typically used for short term financing for a non owner occupied property. Once the loan ends you would either need to pay it off with cash, by selling the property or by refinancing into a permanent mortgage. These types of loans generally have more lenient borrower criteria.
Hope this helps,
Allison