As soon as the economic bubble burst, it seemed the UK was all washed up. Blame partly went to the banks who had given out mortgages to self-certified freelancers. Now, if you are self-employed you’ll be lucky to get a mortgage. However, if there is a will, there’s a way.
Provide at Least Two Years’ Accounts
This is the best way to show your mortgage lenders that you can support the costs of a mortgage. However, if your business seems to be declining in profit, or there are unexplainable fluctuations in your salary, you may not be considered a safe investment.
Bankers are holding tightly to their purse strings and although it is arguably true in this current financial climate that no-one’s jobs are secure, bankers still have complicated feelings about the self-employed.
Register to Vote
Not only are you supporting the democratic system, but you’re enhancing your chances of getting a mortgage by registering on the electoral roll. It helps to establish who you are, so mortgage fraudsters don’t slip through the net.
Making payments, such as covering your bills, and cultivating a history of smart borrowing makes you a safer bet for bankers. Ensure that no cheques bounce, you don’t go over your overdraft, and you make all your payments on time.
If you can show that you handle money well, mortgage lenders are far more likely to trust you; you need to come out of a credit check smelling like roses. A fantastic credit rate will even bring down your interest rates, which will be unavoidably steep because you are self-employed.
Offering a generous down payment ties you deeply in to the contract, even if you’re going through a period of financial difficulty. Obviously, this is what the banks want, and it shows that you have responsibly put aside money to put towards your mortgage.
Cash reserves, such as an emergency fund, also show that you’ll be able to keep up with your monthly payments, even if your business turns sour, so it’s a good idea to save, save, save before you think about getting a mortgage.
Is This Affordable?
Before you enter into any mortgage plans, you need to ask yourself if you really can afford this loan. Losing your home is an unpleasant experience, and all that effort getting your mortgage loan will have been for nothing. If in doubt, wait it out until circumstances change or you save up a considerable sum, otherwise you may live to regret taking out a mortgage loan.
Anyone in a long-term, serious relationship should consider getting a mortgage loan together, especially if your partner is fully employed; it can considerably bring down your interest fees and increase your chances of success.
If you have any rich relatives, you can get them to co-sign your mortgage loan. If you default, it becomes their responsibility to pay the monthly premium, so think carefully and make sure that they can easily afford it.