Self-employed people often have a harder time trying to get a mortgage. However, that doesn’t mean securing one is impossible.
Your requirements for a private mortgage
If you are a sole trader, the lender will want to look at your net profit. They’ll take into account your share of net profit or dividends and salary if you’re a company director, while freelancers and contractors should expect lenders to consider your average earnings over the years. past few years.
Although lenders favor people who have been self-employed for two years or more, it’s possible that you can still get a mortgage even if you only have 12 months in the account. Usually, you’ll need to demonstrate that you have a lot of work coming your way, but keep in mind that you may have limited options.
How much can you borrow?
This depends on the value of your deposit and how much you earn.
You should save as much as possible on your deposit. This usually gives you an annual income that is usually 4.5 times paid. However, this number is not necessarily fixed as it depends on your circumstances. improved scope of potential deals.
After you have all the important information, a self-employed mortgage calculator can help you figure out how much you can borrow. Here are some more tips on how to get a mortgage as a self-employed person.
Also read: What’s better? Borrow Through Bank Or Mortgage Company?
Find yourself a mortgage broker
As a freelancer, time is unlikely to be your greatest asset. So finding a private mortgage company that knows what they’re doing will make for a more efficient process for you.
While the cost of a broker can add up to your total costs, they will know what lenders want and can assist you in finding the right deals. One thing to note here is that some brokers charge their fees to the lender, which means it won’t cost you anything.
Increase your credit score
Sometimes it can be just simple mistakes that lead to your credit rating being lowered, such as an old credit account that hasn’t been closed or is not on the electoral roll in your current residence. at yours.
You should check your score to find out if you can make any improvements. Many companies allow you to do this, such as Experian, Credit Karma, and ClearScore.
Get an accountant on board
Here’s another piece of advice that will add to your overall cost. However, professional advice should not be underestimated.
It is more likely that a lender will trust your financial details if a professional has prepared the account for you. You’ll also save yourself time and benefit from the expert tax advice you’ll receive. For instance, hiring an accountant can help you make tax changes and understand what you can and can’t claim as expenses.
Organize your paperwork
As a self-employed person, you are responsible for keeping accurate tax records. So you should have a system in place to make your paperwork simple and understandable for your lender.
Lenders will also want to see the SA302 form, which you can access from your online HMRC account.
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Source: vothisaucamau.edu.vn
