The House That Freelancing Bought

The past couple of weeks have been pretty hectic for me: my husband and I bought a house and moved into it. I’m still a little surprised that we managed it. After all, I’m a freelancer — a situation that causes many mortgage lenders to break out into hives. Just because my income can vary, the rules seem to change entirely.

However, we did get our mortgage and our house — and I came out of the experience with a few pieces of advice for freelancers ready to buy a home.

It’s All About Income Taxes

If you’re looking for a traditional mortgage, you must have at least two years worth of income tax returns showing at least your current income level. If you’ve made the switch to freelancing full-time in the last two years and don’t have income tax returns demonstrating how much you’re making, many lenders will essentially ignore your income. If you have a spouse who can manage the mortgage payment on his or her own, that’s not a big deal, but otherwise you are going to have to explore other options. I’ve also heard of freelancers taking part-time employment temporarily and having similar issues.

An FHA mortgage offers an alternative. Because the requirements have more flexibility, lenders who offer FHA mortgages are more willing to look at your current invoices and contracts to determine what your income really is. You’ll need a Year-To-Date report for your business as well as any supporting documents that the underwriter asks for. I was able to use a copy of my current outstanding invoices and list the projects that I already have lined up through the end of the year, along with providing a copy of my bank statement (I have a separate business checking account).

Think Ahead For A Home Office

Most freelance writers work from home. That means that making a dedicated home office area a priority during the hunt for a new home makes sense. The specifics of what you need may vary, but make sure you get what you need. As a bonus, it’s important to remember that if you have an area of your house used only for your freelance writing business, you can write off a portion of your utility bills and even your mortgage payments as a business expense.

Talk To A Tax Professional

Buying a house can make a big difference in your tax bill — even more so if you’re used to paying those quarterly estimated payments to the IRS. However, I would definitely recommend talking to your CPA or tax professional to see just how much you can save. My CPA was able to point out that not only would we qualify for this year’s first-time home buyer credit, but we’d also save a ton of money on our income taxes by deducting the interest we’re paying on the mortgage. We’ll actually have more money available after tax season by buying a house.


  1. Lexi Rodrigo   •  

    Congratulations on the new house, Thursday!

    Hubby and I aren’t there yet – we still haven’t decided where we want to plant roots – but when we do, I’ll make sure to read this post again.


  2. Pingback: lexirodrigo (Alexis Rodrigo)

  3. Susan Johnston   •  

    Congrats on your new home! I went through similar scrutiny when I decided to move into my own apartment (I’d been living with roomates before) and the management company wanted proof of employment or a cosigner. I faxed over several of my bigger checks from earlier in the year and a copy of my bank statement and fortunately, that did the trick.

  4. Pingback: UrbanMuseWriter (Susan Johnston)

  5. Pingback: realdelia (Delia Lloyd)

  6. thursday   •     Author

    Thanks for all the well wishes!

  7. Pingback: What’s Up Wednesdays: Got the Power « Beyond the Rhetoric

  8. Eat Smart Age Smart   •  

    I’m sorry if my post on publicists and PR people rubbed you the wrong way!


  9. simon   •  

    I’m quite interested in making more cash.

    How do i do that Thursday beside the newletter?

  10. thursday   •     Author

    @Krizia, I know I come from a more traditional media background than a lot of bloggers. To me, receiving samples is one thing, while expecting them is very different. I’ve gone out and bought review copies more than once because I couldn’t get one through the company or because I didn’t want any question of obligation associated with my review. Just a different school of thought, I guess.

  11. Pingback: pfrigerio (Pierpaolo Frigerio)

  12. Tara M. Clapper   •  

    Congratulations on the new house! I’m just married and am about to embark on a full-time freelancing career (after realizing I am making as much freelancing as I do at my 9-5). The home ownership thing is new to me…I’m a bit confused but will be fortunately talking to an accountant on Friday.

  13. thursday   •     Author

    @Tara, An accountant will definitely be able to help you straighten things out. Mine definitely made life much easier during the whole process.

Leave a Reply

Your email address will not be published. Required fields are marked *