Getting a Mortgage When You're Self-Employed
Most of us want to own our own homes, and most of us want to achieve that goal sooner rather than lantern but it can be more difficult to do so when you are self-employed whether as a freelancer or someone who is running their own business.
Of course, that should not stop you from trying and you should not be too disheartened because it IS still possible to be approved for a mortgage and buy your own home when you are self-employed but you may need to do things a little differently.
With that in mind, here are some tips to help you get that all-important home loan even if you are an online entrepreneur, boss babe or freelancing phenomenon:
Do your homework
First and foremost, if you want to get that mortgage you’re going to want to do your homework. Check out these FHA faqs to see how likely you are to be approved for assistance, check out mortgage calculators to see how much you are likely to be able to borrow and check what paperwork you will need, The more prepared you are, the more likely you are to be approved first time.
Register and license your company
When you’re just starting out, it can be easy to start running your online business on a more freelance basis without officially registering and licensing it, However, this will mean that it can appear less official to some mortgage lenders, which is why if you want to get improved for a home loan, you should make it official and file the relevant paperwork to make your business 100 percent official.
Take a wage
Paying yourself a regular wage instead of drawing from your business whenever you need the cash will make it appear more like you receive a regular income which is one of the main things most lenders are looking for. So, if it is possible for you to do this, you probably should.
Lower your debt burden
The lower your debt to income ratio is, the better a position you will be in to get a mortgage and buy your dream home, even if you are self-employed and running your own small business. So, make a real effort to start paying as much off your debts as you possibly can.
Exploring Financial Security
Homeownership isn't just about securing the mortgage itself; considering factors beyond the loan is crucial. While you're focused on obtaining a mortgage, it's worth exploring options that go hand-in-hand with ensuring the longevity of your investment. Mortgage protection insurance, often discovered through mortgage protection leads, can provide that extra layer of security, ensuring that your loved ones won't face undue financial burdens in the event of unforeseen circumstance
Use accounting software
Most lenders will want to take a look at your business’s books, and if they are not in a good state, it may put them off lending you the money you require. Luckily, it’s easy to keep good records -which will also help you when the time comes to file your business taxes - using software like QuickBooks which all but automates the process and keeps the math straight. Shop around with different mortgage lenders too, as well as highstreet banks there are options like Evolve Bank & Trust that are worth looking into as well.
Getting a home loan can be tough when you are running a small business, but as you can see, there are plenty of things you can do to sway the balance in your favor, so be proactive, do what you can to improve your chances and enjoy building the life you really want to live.
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