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If freelancers establish an S-corp or LLC and pay themselves regularly using a payroll service it should make it much easier. I have done this since I went inde
by javery 17y ago
If freelancers establish an S-corp or LLC and pay themselves regularly using a payroll service it should make it much easier. I have done this since I went independent 5 years ago and it has helped greatly when dealing with banks (I got my mortgage before I went independent though but I would assume it would help with that).
This eliminates the majority of the complaints banks have. The income is well documented and steady, and you can have money in the bank to show them.
- petercooper 17y agoFWIW, I know of someone who set up a corporation, hired themselves, funneled some of their savings through the corporation back to themselves as income, then once they had 3 payslips (what the mortgage companies wanted), they got the mortgage they wanted. They had to pay income taxes on the money, of course, but they could effectively create any level of income they wanted that way. Thankfully I didn't have to go to such crazy extremes. I went to a mortgage broker and they somehow made the mortgage company happy with three years of tax returns (on a normal, non-self-approved rate too).