Self Employed Mortgages: Getting Approved Simplifiedthehomemortgage
Self-employed mortgages are regular mortgage. But the process has been segregated since the new rules have made it harder for the freelancers and the business owners to get the mortgage they need. Self-employed mortgages can be obtained easily if you have a good credit score and a valid proof of income. But what if you have bruised credit? Here is a list of things to check off your list for a self-employed mortgage:
- Maintain a good credit score: The key to getting a good mortgage is to have a good credit score. Self-employed mortgages are no different. The credit score of the concerned person has to be above a specified score. If you do not have a good credit score, you can either wait and build up your score or you can talk to your mortgage broker.
- Provide proof of income: Lenders usually require a lot of documents to facilitate a self-employed mortgage. The proof of income is one of the most important things to provide your lender with. This helps them to build confidence in your application. The lender would require tax statements for the previous two financial years at the least for your self-employed mortgage.
- Be ready to make a hefty down payment: While applying for a self-employed mortgage, it is important to understand that you will have to pay a higher down payment than people applying for a normal mortgage. This is because you seem like a higher risk to the lender and a larger down payment helps ease their mind. The larger you pay, the better rates you are going to get. It is better to start saving for the down payment.
- Work on your debt-income ratio: A credit score is important but so is your debt to income ratio. The ratio sees the relation between your income and whether your debt exceeds it or not. The higher the difference from your income to your debt, the better the deal you will get. Make sure your debt to income ratio has your income in excess.
- Hire a mortgage broker: A mortgage broker could actually be the reason you get your self-employed mortgage. He knows the system and also has access to a lot of lenders. They can help you get the best deal for your mortgage needs even when you have a less than worthy application.