Qualifying for a traditional mortgage when you are self-employed may be more difficult than qualifying with a regular job, but it is not impossible. To improve your chances you will want to have the best credit rating possible for both your personal finances, and for your business. To do this you should:
Pay off all of your credit cards but keep the accounts open.
Make on-time payments.
Correct mistakes and update your credit report.
The next step to improving your chances of getting a traditional loan when you’re self-employed is to have your income and assets well documented and ready for the financial institution’s review. This includes: contracts, financial reports (last three years), tax returns (last three years), marketing plan, projected earnings report, bank statements, copies of royalty checks or residual checks, and any other letters of credit reference.
If you still are not able to get a traditional loan you may want to consider putting more money down in order to qualify. Instead of 5% down, put 10, 15, or 20% down. The more money that you are willing to put down, the more secure a bank will feel when considering you for a home loan.