Getting a mortgage while you are self employed may be hard, but it is nowhere near impossible. Most companies are known to approve mortgages for people who are employed because they have a more constant and predictable income pattern. Without constant income, it may be hard for a lender to tell whether you will complete the payments, or even make all the monthly payments at all. If you are self employed, this guide will let you know how you can easily get a mortgage loan.
This is how your business affects your mortgage
If you work alone, it is going to be hard to obtain a real estate loan. Lenders tend to look at your profits over a couple of previous years to determine how much mortgage they can offer to you. if you have well kept legal records, it will be easier for you to get an approval
It involves business connections between two or more people. When looking through your income, a mortgage lender will only consider your share of the profit. Before you apply for a mortgage, ensure all your transaction and account show your side of the income and properties
Typically, companies are made up of a variety of people working for different sections of the same business. Lenders will look at your income of you are applying for a personal mortgage and the company’s profit of you are applying for a commercial mortgage.
Here are the qualifications for mortgage if you are self employed
If you are self employed, mortgage lenders will determine how much to lend you by calculating the profits of your company for the past few years. Your business must be legal for you to get an approval.
One thing you should be worried about is how long you have been in business. If your business is no more than two years old, you are likely to miss out on the mortgage loans. Lenders want an assurance that you have a stable business that will run for more years, and you will be able to make the monthly mortgage payments.
a good credit record will increase your chances of getting a mortgage loan. good credits mean you make all your loan payments on time. Lenders always check your credit score to see your loan payment progress in the past. If you have a bad score, you will receive a lower mortgage or no mortgage at all
How can you prove your income?
To prove your income, you need to provide the lender with a legal document which covers not less than two years of your work progress. Ensure you understand the documents before you hand them over to the lender. Keep in mind that some lenders will not consider retained profits as part of your income. If you are missing out on a mortgage from brokers, it may be easier for private banks to approve your loan application.
Finding a mortgage broker to approve your loan is hard. You have to find a lender who is willing to give you a loan when you are self employed. Ensure you meet the qualifications above before you make a mortgage application to minimise failure.