Knowing what to expect and steps to take when applying for mortgage as self-employed or a freelancer can help you be successful. (Photo: Pexels).


Tom Kalinski, RE/MAX of Boulder

Even before COVID-19, the gig economy was on the rise. By choice or necessity, more and more people worked on their own. The result proved to be significant: over 50 million Americans worked as freelancers this year, according to reporting by

Nationwide, that’s about 35% of the workforce. Here in Boulder County, the availability of freelancers, task rabbit workers or temp workers is ample. According to reporting in spring 2020 by the Boulder Daily Camera, though the exact size of the gig economy in Colorado’s workforce is unknown, they say it’s probably more than 10% of the working population.

In addition, COVID-19 has made many of their financial situations more challenged. In this economic realty, here’s the latest on what to expect when applying for mortgage as a freelancer in the post-coronavirus era and steps you can take to be successful.

Pre-pandemic mortgage approvals
Pre-approval for a mortgage is still the standard starting point for buying a home. The goal of this process is to confirm your income.

To document your income, typically borrowers need two years of tax returns and proof that their business was in operation. This provides a financial statement of losses and gains for a business over a period of time.

In addition, like all borrowers, prospective lenders require a minimum credit score and maximum debt-to-income ratio. It’s important to find a lender with competitive mortgage rates who can help with pre-approval.

Post-pandemic mortgage approvals
So what’s different now that we have the pandemic impacting our economy? For freelancers, the big change is that documentation requirements have increased significantly.

The pandemic-era economy makes lenders even more cautious about loaning money. The qualifications are stringent and based on who can realistically repay the loan.

Prior-year tax returns are no longer enough. Now lenders need a year-to-date profit and loss statement along with supporting documents such as a business bank statement.

In other words, lenders need a lot more proof that you’re in good position to take on that mortgage.

Increasing your chances of mortgage approval
It’s important to put first thing first. You need to take the usual steps like ensuring your FICO® credit score is 740 or higher and that your debt-to-income ratio is smaller than 36 percent, with no more than 28 percent of the debt going toward servicing your mortgage.

Here again, you’ll need documents to prove your income. Prepare profit and loss statements and gather bank statements to back them up. To prevent any hold-ups, document as far back as you can. If possible, document 24-months of income flow. The goal is to prove you can consistently afford loan payments.

The best plan is to be prepared and get these documents ready before you start the process.

For more information, visit

By Tom Kalinski. Tom is the broker/owner of RE/MAX of Boulder, the local residential real estate company he established in 1977. He was inducted into Boulder County’s Business Hall of Fame in 2016 and has a 40-year background in commercial  and residential real estate. For questions, e-mail Tom at [email protected], call 303.441.5620 or visit