Running a business as a self-employed individual has plenty of challenges, and one of the challenges is getting your mortgage application approved. However, it does not have to be a stressful task. Being a self-employed individual means you have to present more evidence and paperwork, otherwise, your loan will not get approved. Below mentioned are things to keep in consideration when applying for a self-employed mortgage:

Take into account your personal finances. Will you be able to make the scheduled repayments over the long term? Do you have any prior debts? Analyze your budget and see where you can make savings. Additionally, take into consideration whether your taxable income is enough to afford the monthly repayments.

  • Start planning for your mortgage early-on

Concerning mortgages, preparation is the key to success. By laying the groundwork now, you will significantly improve your chances to own your dream house. Lenders will take a look at the below-mentioned details when considering your mortgage application:

  • Your credit file
  • Your debt-to-income ratio
  • Your business files

The quicker you get these details in order, the better your chances of approval.

  • Ensure your accounts are in order

When applying for a mortgage, lenders will ask for a minimum of two to three years of certified accounts. Certified accounts are nothing but those accounts prepared by a qualified chartered accountant. The first step when planning to apply for a mortgage is to hire a trusted accountant. They do not just make sure all the necessary documents are obtained for mortgage approval, but also offer expert advice to make more well-informed decisions.

  • Manage a good credit score

A self-employed mortgage just like any other type of mortgage application will be subject to a credit check. Your credit score indicates to the lender what type of borrower you are, and how likely you will be able to keep up with the scheduled monthly repayments. Your credit report includes various factors such as:

  • Your prior history of credit repayments
  • Your total debts
  • How much credit you are currently using
  • Total number of credit searches you’ve made
  • Your public records

The higher your credit score, the better your chances of getting your mortgage application approved by the lender.

  • Ensure you stick to your budget

In addition to the business finances and credit history of the borrower, lenders will also undertake an affordability assessment that will consider your incomings and outgoings such as loan payments, bills, car payments, monthly shopping spending etc. How much money you have left over after your monthly expenses will impact:

  • If you are eligible for a mortgage
  • How much the lender will loan you

Months before applying for a mortgage, make sure to keep the monthly outgoings to a minimum. Hold back on any lavish and unnecessary spending unless it is needed. If you have any outstanding loans or credit card payments, try to pay them off before applying for a mortgage.

To find out more details about self-employed mortgages or to apply for one, get in touch with the team at Sure Loan For You today!

Posted in Mortgage Service, Self-Employed Mortgage and tagged , , , , , , , , ,