Mortgages are helping so many women to buy and own their own houses and landed properties. There is no more significant asset than owning a home of your dreams; you have to make the initial investments.
How do you get the right mortgage plan as a self-employed female? We all know that mortgage companies tend to be very skeptical about loaning self-employed individuals because they believe that their income fluctuates a lot.
And also, it is hard to say if they will be able to pay back their loans with such unstable income. That is very responsible of them to be concerned about if you ask me. There is hardly anyone that wants to lose money.
So, how do you put yourself in the right position as a self-employed lady, so that these mortgage companies won’t overlook you? How do you put together your application documents so that you can get the right self-employed mortgage plan for you?
Let’s look at some tips below.
Save up for down payment
The more down payment you put down, the less money you will have to borrow to buy the house or a landed property. And the lesser the amount of money you borrow, the lesser interest you have to add when you want to pay back.
So, start now by saving up for down payments that you will give the mortgage company. Also, your down payment covers the insurance fee you would have paid in the future.
Many mortgage companies require the borrower to pay at least 20% down payment to protect the lender’s financial interest, in case the borrowers can’t payback.
The right mortgage plan will make it compulsory for you to put down a 20% down payment or thereabout before they approve your application.
Wait till you have a stable income
This stage is crucial because it is one of the most necessary things the mortgage companies will look at when going through your application documents.
Your income does not have to be fixed throughout the three years, but you have to be at an excellent earning standard over those years.
More so, if you have only been an entrepreneur for six months, one year or even two years, do not be surprised if they do not give you a callback.
They will believe that since you are just starting your business and that you haven’t gotten your feet on the ground yet.
That might lead them to reject your application, so make sure you have been in the business or have been self-employed for more than three years, at least. It will increase your chances of getting the mortgage loan.
Check your credit score and work to improve it
Your credit score is the key to all financial opportunities. It is also an essential factor to consider when applying at https://rightmortgageuk.co.uk/, one of the trusted mortgage company. If your credit score is too low, you might be rejected.
Make sure that you pay any debt and follow up on outstanding invoices before applying for a mortgage. It’s best to use a trusted service provider for running a credit check.
Once you have checked your credit score, be sure to take appropriate steps to improve it so that mortgage companies won’t turn down your application.
Do your research well on the best mortgage companies
Ask your family, friends, or any persons of experience with mortgages for suggestions on which mortgage companies are best. Ask them of the recommendations regarding mortgage brokers as those will guide you as well.
Once you have gotten several good options, you could use the knowledge and expertise of the mortgage broker you have contacted to pick the best mortgage company for you. You could also apply for government-assisted mortgage programs.
Avoid the common mortgage mistakes
There are inevitable mistakes that are often overlooked during the mortgage application process. Business owners tend to make them in a bid to maintain an impressive outlook to lenders.
They can reduce your chances of getting the right self-employed mortgage or may lead to other issues later on. Let’s briefly address a few of these mistakes.
Running a business no matter how small requires funds, and business owners must maintain positive cash flow. It shouldn’t be done when it’s time to apply for a mortgage alone.
Since you want to use the latest technology for your business and scale faster, try to limit your outgoings. Lenders can be discouraged once they discover that you keep racking up extravagant expenses.
Reducing your taxable income
Your taxable income will influence how much lenders are willing to give out. Business owners with a higher taxable income have a better chance to borrow more. Reducing taxable income can attract different issues when applying for a mortgage.
Keep your finances in order
Working with a certified accountant is one of the basic requirements for most lenders. That will assist you to arrive at an accurate figure. However, this doesn’t imply that you should depend entirely on your accountant.
You should be able to explain your business finances in clear terms. That is because lenders are always looking for an assurance that borrowers have what it takes to handle the loan judiciously and repay in time. Without mincing words, understanding your finances isn’t rocket science.
The bottom line is to develop a keen interest and maintain a sound relationship with your accountant. Trustworthy ones will be willing to share insights whenever you ask questions. Consider using accounting software to manage your finances.
Working with a professional mortgage broker can give you an edge over other self-employed women looking for mortgage plans. You can rest assured that they will have lenders who can meet your needs in their network. Nevertheless, don’t hesitate to share your options with them.
Using the six tips listed above is a sure way to get the right mortgage you’re looking for as a self-employed female. So, best of luck in your search for the right mortgage plan for you.