Why Getting a Mortgage Was Hard for Me Even Though I Have an 810 Credit Score

A credit score isn't the only thing that matters when lenders consider whether to approve a loan.

A few years ago, I applied for a mortgage loan in order to refinance my existing home loan. I had a credit score of 810 at the time and I had been paying on my loan for years without ever missing a payment. 

Despite my great credit, I had a really difficult time finding a mortgage lender who was willing to give me a loan. And that's true even though I was an ideal borrower who was taking out a loan for far less than my home was worth and the mortgage was my only debt at the time. 

So, what was the issue? 

Getting a mortgage was really difficult for one simple reason

There was one reason, and one reason only, why I had such a hard time getting approved for a mortgage loan. I am self-employed, and so is my husband. Neither one of us has an employer that provides a W-2 paycheck, which is what most lenders look for when asking for proof of earnings.

Now, I have been working as a freelance writer for many years, including with the same companies for a long time. And my husband owns his own chiropractic practice. We had plenty of stable income coming in between the two of us. But many of the mortgage companies we talked to did not see it that way. They saw too great of a risk because neither of us had the promise of a stable, steady paycheck coming in on a set schedule.

Lenders were especially concerned with my income because it has fluctuated dramatically over the years based on which clients I was writing for and the amount of work I was taking on. In a world where most people have relatively stable income, I made them nervous and was given credit only for a very small amount of what I earned. 

How to get a home loan in challenging situations

Ultimately, we were able to find a lender who was willing to work with us and give us the loan we wanted despite the fact that our income comes from non-traditional sources. The key was for us to shop around and find a loan provider that had worked with many self-employed people before and that was willing to consider all of the evidence of our earnings and not just look for a pay stub.

This experience taught me that the key to finding a home loan when you have unique circumstances is to make sure to find the right lender that is comfortable dealing with similar types of situations. 

Whether your issue is a lower credit score than you'd like, lots of debt from other sources, or income from non-traditional sources, chances are good there is a loan provider out there catering to people like you. You're much more likely to be able to get approved for the loan you want at an affordable rate if you find that lender, rather than trying to work with a different one that isn't as comfortable with people like you.