Buying a home is daunting for anyone, but its notoriously hellish if youre self-employed.

It takes a lot of paperwork: tax forms, letters, licenses.

The key to making it all easier is to plan ahead.

Heres what you should do.

It makes sense; they want to know youll actually be able to pay them back.

When you have an employer, this is as easy as checking out your pay stub.

When youre self-employed, its more challenging.

Youll have to hand over your last two tax returns.

To do this, youll fill out IRS 4506-T, giving the lender access to your tax records.

You use it if youre self-employed and not a legal entity, like a corporation.

It documents profit or loss from your business.

Form 1120S:These are mostly for large corporations.

They document profit and losses, too.

K-1:This documents shareholder or partner profit or loss.

But thats not all.

Lenders might ask for other documents to verify your income, too.

Beware Large Deposits

If youre self-employed, your income can often be irregular.

This is fine when its documented on those above mentioned forms.

But when you have a large, irregular deposit during the mortgage process, it can be a problem.

If you might delay it in some way, thats great.

If not, be prepared to provide even more documentation and answer a slew of questions from the lender.

Work on Boosting Your Credit

Good credit can improve anyones chances of getting a loan.

So if youre self-employed, you especially want to ensure your credit is in good shape.

According to CNBC,lenders typically want a score of 740 or higherto offer their best rates.

They usually want a score of at least 640 just to be approved.

If youre self-employedandyour credit isnt stellar, youve got two issues working against you.

The good news is, there are a number of ways tokeep your credit in check.

And when youre applying for a mortgage, you want to be organized.

Separating your accounts helps lenders navigate your business expenses and income.

Check outour guide to managing your self-employed incomefor more details on how to do this.

We self-employed folks love them around tax time, because of the deductions.

Write off a business trip, for example, and your taxable income is reduced.

But lenders look at this taxable income after those expenses have been deducted.

So this lowers your reported income, which can hurt you when youre applying for a home loan.

(The IRS has a three-year statute of limitations on amended returns.)

Reconsider Your Loan Amount

Another option to avoid rejection is to simply deal with a smaller loan.

This means increasing your down payment or settling for a less expensive house.

Its pretty common practice for self-employed borrowers to put down more money.

Maybe you dont want to settle for a less expensive home, either.

Traditional mortgages are calledqualified mortgages, which fall under guidelines set by government controlled agencies.

But a lot of smaller lenders are offering alternative options for self-employed people.

Two years is the standard most banks use, but an alternative loan may work for you.

For example, Bankratepoints to alternative income verification loans.

Heres how one works:

So far, only niche lenders, such as Western Bancorp, offer these.

Borrowers also must provide a profit-and-loss statement to match to the bank statements.

This is just one example of a lender that offers an alternative.

you could expect similar rules, fees, and hiked up interest rates with other alternative loans.

Its also riskyyou dont want toown a home and have nothing saved for retirement.

Youll have to weigh the cost-benefit and do your research to verify youre going with the best option.

Chances are, if youre self-employed and youre trying to get a mortgage, youll run into some hurdles.