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6 first-time home buying tips for freelancers

couple with dog unpacking in their new home
January 18, 2018

By Maggie Tomasek

The home buying process may seem daunting, especially for first-time buyers. When you’re a freelancer, your sometimes complicated finances can make buying a home feel even more out of reach. But fear not: you have plenty of great resources at your disposal to help guide you.

Check out these pro tips for freelancers looking to buy their first home, courtesy of some residential lending experts at Alliant.

  • 1. Practice makes perfect: Simulate setting aside the amount of money you’d be spending on a mortgage given your budget, says Jerrold Anderson, Alliant Vice President of Residential Lending. You’ll get a chance to feel like a home owner before making any commitments. Plus, it’s best to know what you can afford and not just what a lender will approve. “If a lender tells you the maximum you can qualify for and you don’t know your limits, you may become overextended. It’s not good to be house rich and cash poor,” Anderson says.
  • 2. Gather your documents: To prove your annual income as a freelancer, lenders like Alliant may require at least two years of business and personal tax returns filed with the IRS, says Mark O’Dell, Alliant Residential Loan Production Manager. Also, know your credit score, understand what your monthly expenses look like in addition to your income and be upfront about any outstanding loans or debt.
  • 3. Get prequalified early: “The best advice we could give is to speak with a loan officer and get pre-qualified very early in the home-buying process,” O’Dell says. That will allow you to know what home values to target in your search, and give you more confidence about your homeownership prospects. Most importantly, don’t underestimate the importance of the relationship with your lender.
  • 4. Know your down payment options: The days of needing a 20 percent down payment are gone, with 5 percent, 3 percent and even zero down payment loans now available from many lenders, Anderson says. For example, Alliant just introduced a zero down payment loan to qualified first-time homebuyers under its Alliant Advantage Mortgage Program. Many first-time buyer candidates have the credit and income requirements met, but have not yet saved for the down payment. The zero down payment loan removes that obstacle. Alliant’s program also does not require private mortgage insurance (PMI) and does not have income limits, which are common for many other programs.
  • 5. More than the mortgage: Remember that after you move in, the spending doesn’t end there. New furniture, appliances, decorating, higher utility bills, association fees, lawn care and general maintenance expenses also will put financial pressure on new homeowners, so budget accordingly.
  • 6. Find a real estate agent: Once you know your budget and you’re prequalified, you’ll be ready to start looking at homes. O’Dell says a good real estate agent – someone who will listen to you and who knows your market – can make a world of difference. Also, programs like Alliant Home Rewards, which pairs homebuyers with a local real estate agent and also offers a cash back rebate, can be valuable tools for finding the right agent while streamlining the entire homebuying process.

Maggie Tomasek is the PR and Social Media Specialist at Alliant. She began her career as a journalist for newspapers in Utica, N.Y., Des Moines and Cincinnati before moving to Chicago in 2009. Maggie is a seven-time Chicago Marathon finisher and a lifelong creative writer with a passion for comedy. Her mom instilled in her a great sense of fiscal responsibility, and her big sister told her to throw that responsibility out the window every once in a while in the name of life experience. So far, that combination of financial advice has worked out pretty well for her.