Self-employed? 5 Top Tips for Getting a Mortgage! Nov 24th
If you’re self-employed, you’ll most likely be aware of how challenging it is to convince a lender to grant you a mortgage loan. It’s often part-and-parcel of self-employment you’re your remuneration can be sporadic and unpredictable; lenders, knowing this, are often concerned about whether you’ll be able to make your agreed loan repayments on time.
Additionally lenders require detailed income checks and they’ll also expect to examine your historical declared earnings: this can add weeks to the mortgage application process. Regarding eventual buying success, this extra delay has often caused potential sellers to pull out before you can complete your conveyancing process.
So how can you give yourself the best chance of finding a mortgage lender and mortgage suited to your needs? Here’s 5 basic steps which should help you.
1 Get a year under your belt
It’s fairly certain that no lender is likely to consider granting you a mortgage if you’ve been trading for less than a year.
Once a year has elapsed, you might find some lenders willing to refer your application to their underwriters for risk assessment. Once you’ve stayed afloat for 3 years, all other things being equal, lenders will generally view your income as stable. After which you can consider getting in touch with a Bridging finance broker LDN Finance or similar others to help you secure funds for your venture.
2 Check your credit score
Once you’ve bought a home and have a record as a mortgagor, assuming you’ve successfully made your monthly repayments without defaulting, you can reasonably assume you’ll have a good credit score and have more chance of getting a mortgage again.
On the other hand, if you’re a first time buyer with a relatively small deposit, it may be that your credit score is too low to satisfy a lender.
However, there might still be a way you can secure a loan despite a bad credit score. In such cases, you could get in touch with a mortgage broker, like those working at Prime Mortgage Solutions, as such professionals often claim they will go the extra mile to find you the best deal despite your poor credit, and they tend to keep their word. Hence, a mortgage broker for bad credit could be an invaluable asset.
Keep in mind, it’s worth checking your credit score and report with the 3 main credit reference agencies, given that this is always of huge importance to prospective lenders.
3 Consider an offset mortgage
If you’re successful in getting a mortgage while self-employed, having a bank account with your mortgage lender is a way you can potentially reduce your monthly interest repayments.
Frequently, self-employed workers put cash aside every month towards paying off their yearly tax demand – this practice works very well if you have an offset mortgage and additionally is a hedge against an unpredictable income stream.
On the flip side, these kind of mortgages often carry a higher interest rate than many other products – you need to compare rates and consequent repayment amounts carefully.
4 Work with a mortgage broker
Independent mortgage brokers (i.e. those who are not tied to a particular lender) usually have access to the whole of the market of mortgage products.
Consequently, a mortgage broker can help you identify a suitable self-employed mortgage product that meets your individual needs and provide advice on the likelihood of your mortgage application being approved. Therefore, if you are considering taking out a mortgage, you can seek the assistance of a local mortgage broker (similar to this Red Deer mortgage broker) to obtain a mortgage quickly and easily.
5 Gather together your previous years’ accounts
You can expect it to be harder work getting a mortgage if you are self-employed compared to if you are employed. You can best help yourself at the start by getting your previous 3 years of financial accounts (if you’re a company) or tax returns together. These records are always key information for your lender to scrutinise.
With increasing numbers of people in the UK now classed as self-employed, it follows that mortgage lenders are getting more used to applications from this sector. And even if more work is involved for these applicants, persistence and an organised approach can help them win the day.
Marcus Simpson
Editor
Nov 24th
If you’re self-employed, you’ll most likely be aware of how challenging it is to convince a lender to grant you a mortgage loan. It’s often part-and-parcel of self-employment you’re your remuneration can be sporadic and unpredictable; lenders, knowing this, are often concerned about whether you’ll be able to make your agreed loan repayments on time.
Additionally lenders require detailed income checks and they’ll also expect to examine your historical declared earnings: this can add weeks to the mortgage application process. Regarding eventual buying success, this extra delay has often caused potential sellers to pull out before you can complete your conveyancing process.
So how can you give yourself the best chance of finding a mortgage lender and mortgage suited to your needs? Here’s 5 basic steps which should help you.
1 Get a year under your belt
It’s fairly certain that no lender is likely to consider granting you a mortgage if you’ve been trading for less than a year.
Once a year has elapsed, you might find some lenders willing to refer your application to their underwriters for risk assessment. Once you’ve stayed afloat for 3 years, all other things being equal, lenders will generally view your income as stable. After which you can consider getting in touch with a Bridging finance broker LDN Finance or similar others to help you secure funds for your venture.
2 Check your credit score
Once you’ve bought a home and have a record as a mortgagor, assuming you’ve successfully made your monthly repayments without defaulting, you can reasonably assume you’ll have a good credit score and have more chance of getting a mortgage again.
On the other hand, if you’re a first time buyer with a relatively small deposit, it may be that your credit score is too low to satisfy a lender.
However, there might still be a way you can secure a loan despite a bad credit score. In such cases, you could get in touch with a mortgage broker, like those working at Prime Mortgage Solutions, as such professionals often claim they will go the extra mile to find you the best deal despite your poor credit, and they tend to keep their word. Hence, a mortgage broker for bad credit could be an invaluable asset.
Keep in mind, it’s worth checking your credit score and report with the 3 main credit reference agencies, given that this is always of huge importance to prospective lenders.
3 Consider an offset mortgage
If you’re successful in getting a mortgage while self-employed, having a bank account with your mortgage lender is a way you can potentially reduce your monthly interest repayments.
Frequently, self-employed workers put cash aside every month towards paying off their yearly tax demand – this practice works very well if you have an offset mortgage and additionally is a hedge against an unpredictable income stream.
On the flip side, these kind of mortgages often carry a higher interest rate than many other products – you need to compare rates and consequent repayment amounts carefully.
4 Work with a mortgage broker
Independent mortgage brokers (i.e. those who are not tied to a particular lender) usually have access to the whole of the market of mortgage products.
Consequently, a mortgage broker can help you identify a suitable self-employed mortgage product that meets your individual needs and provide advice on the likelihood of your mortgage application being approved. Therefore, if you are considering taking out a mortgage, you can seek the assistance of a local mortgage broker (similar to this Red Deer mortgage broker) to obtain a mortgage quickly and easily.
5 Gather together your previous years’ accounts
You can expect it to be harder work getting a mortgage if you are self-employed compared to if you are employed. You can best help yourself at the start by getting your previous 3 years of financial accounts (if you’re a company) or tax returns together. These records are always key information for your lender to scrutinise.
With increasing numbers of people in the UK now classed as self-employed, it follows that mortgage lenders are getting more used to applications from this sector. And even if more work is involved for these applicants, persistence and an organised approach can help them win the day.
Marcus Simpson
Editor
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