How to Improve Your Chances of Approval for a Self-Employed Mortgage
A self-employed individual in Canada is someone who runs their own business or works as an independent contractor without being employed by someone else. They are their own boss, responsible for all aspects of their business, including finance, marketing, operations, and client acquisition.
Self-Employed Mortgage
A self-employed mortgage is a type of loan designed specifically for self-employed individuals who may not have the same documentation of income and employment as a traditional salaried employee. Because self-employed individuals often have more complex financial situations, it can be more difficult for them to obtain a mortgage. Self-employed mortgages take into account a range of factors, including credit score, income, assets, and debt-to-income ratio, to determine eligibility.
How To Get a Mortgage When Self-Employed?
As a self-employed Canadian, obtaining a mortgage can be a challenge. Unlike traditional employees who receive a regular income, you may have fluctuations in your income or business revenue, making it harder to prove your financial stability. But don’t worry, there are still ways to improve your chances of approval for a self-employed mortgage. In this article, we’ll explore some tips to help you secure the mortgage you need to buy your dream home.
Keep your financial records up to date:
When you’re self-employed, you need to keep detailed records of your income and expenses. Make sure to keep your financial statements, tax returns, and any other financial documents up to date and organized. This will help you demonstrate your financial stability and make it easier for lenders to assess your creditworthiness.
Boost your credit score
Your credit score plays a significant role in determining whether you’ll be approved for a mortgage. As a self-employed individual, you may not have a regular paycheck, which can make it harder to maintain a good credit score. However, there are things you can do to improve your credit score, such as paying your bills on time, keeping your credit utilization ratio low, and avoiding opening too many new credit accounts.
Save for a larger down payment.
One way to improve your chances of getting approved for a self-employed mortgage is to save for a larger down payment. A larger down payment can show lenders that you’re serious about the investment and that you have the financial stability to support it. Plus, a larger down payment can help you qualify for a better interest rate, which can save you money in the long run.
Be prepared to provide additional documentation.
When you’re self-employed, you may be required to provide additional documentation to support your mortgage application. This may include business financial statements, tax returns, and bank statements. Make sure to have all the necessary documentation ready in advance to speed up the process and improve your chances of approval.
Work with a mortgage professionals
Working with a mortgage professionals can be beneficial for self-employed individuals. Sure Loan for You is a team of professionals who will make the mortgage process as simple and as easy as possible and ensure that you’re getting the best possible deal.
In conclusion, getting approved for a self-employed mortgage can be challenging, but it’s not impossible. By keeping your financial records up to date, boosting your credit score, saving for a larger down payment, working with a mortgage broker, and being prepared to provide additional documentation, you can improve your chances of getting the mortgage you need to buy your dream home. Contact Sure Loan for You today to discuss about self-employed mortgage in more details.