The number of self-employed people has increased dramatically over the years. Their low earnings don’t mean that they can’t get mortgages. Those who work but do not have enough earnings can still get a decent deal for themselves. A money-lender will just focus on two areas: How much is the borrower earning? And with how much confidence he will sustain the level of earnings?”
If you need to prove your income, you will be needing to give at least two years of accounts to your lender. You can put this together by a chartered accountant (CA) so that your lender can have full faith in your ability to repay the loan. You have to make sure that you are well-versed with the figures and have the skill to convince the lender.
For example: If you are suddenly facing a financial crunch at a certain point, and you are able to explain what happened and why in a convincing way. Also, if you can explain the variations in an impressive way and not getting muddled when questioned, you will have more chances to get the mortgage.
What if you are recently self-employed?
If you have been in a business for a year, don’t lose hope. There are special lenders who consider the applicants with a year experience as well. It is important for the lenders to know about your business structure. Whether you are a contractor, director of a company or a sole trader, you will be evaluated differently, considering your income has increased or decreased in the past few years. For example: If your income has increased, the lender will calculate your average income from the past two or three years and if it has decreased the lenders will use the latest and lowest figure.
If you are a contractor, getting your earnings per day, lenders will multiply the amount you get per day with the number of working days in the year. They will look at your contract history.
Those who are working as a company director, there are two methods to assess their income. The first way is by calculating the income and any dividends from the business. The second option is by accessing the salary along with the profit gained.
By getting along with our mortgage agents, things will be easy. You will be able to get out of difficult situations easily with favorable deals. Our agents have the trick to create favorable circumstances for all our customers.
A mortgage agent is invaluable when you are self-employed. Our agents are well-versed with various lenders. They know which lenders are willing to lend money to self-employed, which otherwise is an arduous task. You will also be getting your deals in the best margins. Take home all the profit.
- You need to be updated with your records and accounts.
- You can hire a skilled mortgage agent to do the documentation and keep a check on tax returns as well.
- Be open with your mortgage agent. Try to know everything, talk about the best options available and tell everything about your real financial status to your agent.
It is better that you talk to your financial adviser as well as the mortgage agent before you apply for the mortgage.