It’s true that many lenders hesitate to finance mortgages for those who are self-employed. That doesn’t mean it’s impossible to obtain financing. What it does mean is that obtaining financing may require some strategies that people who work for others don’t have to think about. If you’re in the market for a mortgage for self-employed people, these tips will improve the odds of securing the financing that you seek.

Be Prepared to Supply a Larger Down Payment

Having more money to apply to the purchase of the home translates into needing less financing. It also means that the deal starts off with less risk for the lender. When the amount financed amounts to around 60% of the current market value of the property, the lender is less worried about possible defaults. That’s because it would be easy to recoup the funds due if you did default. It doesn’t hurt that a larger down payment translates into lower mortgage payments for you, payments that would be easier to make each month.

Expect Higher Interest Rates

Even with a larger down payment, lenders will still consider you to be a greater risk than someone who is employed by an established business. That means the first round of financing will likely come with a higher interest rate. Your job will be to find out which lenders are willing to provide the financing at the most competitive rate.

Keep in mind that you’re not necessarily stuck with that rate from now on. After several years, you may want to look into options for refinancing. At that point, your good payment record may help the lender to see you as a better risk. If so, the refinancing offer could include a lower rate of interest as well as some other perks.

A Lower Debt to Income Ratio Helps

You can also help strengthen your position by making sure that you’re carrying less secured and unsecured debt. The goal is to demonstrate that more of your monthly income can go toward making the mortgage payments while less of your earnings are tied up making payments on credit card balances. The fact that you have more disposable income and relatively little debt will help make you more attractive to a wider range of lenders.

As Does a Higher Credit Score

Always check your credit score before applying for any type of financing. That includes efforts to obtain a mortgage. Don’t check with one agency and consider the task done. Since you never know which agency a lender is likely to consult, it makes sense to look at all of your credit reports.

Don’t be surprised if they aren’t perfect matches. Some creditors only report to one agency while others report to all of them. If you see anything that’s outdated or otherwise inaccurate, it’s to your advantage to report the problem and work to get it corrected. Doing so could go a long way in raising your credit scores and making you more attractive to different mortgage lenders.

Whether you want a first mortgage or would like to look into the potential of getting better mortgage refinance rates, take a good look at your overall financial picture. Do what you can to ensure that lenders see you as less of a risk. In the long run, these and other efforts will go a long way toward saving money and helping you get the financing that you want.