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Getting a mortgage for the self-employed

For the many that are self-employed, getting a mortgage is a nightmare. You will have to do a lot to convince the banks to offer you a loan thus making it an uphill task each time you have to. Even so, if you knew what to do, you can put yourself in a position where you are seen as creditworthy by the bank thereby ensuring that you get the mortgages whenever you want them. Truth is, as a self-employed individual, you need the banks if you are to expand your businesses beyond your imagined scopes. Accordingly, making yourself creditworthy should be on your to-do list and as such, keep it so for as long as you can. It is important that you do not forget conveyancing costs either!

One of the best ways to do this is to boost your net income for every year. To do this, you have to ensure that you regularly let your earning go through the bank. Each time you increase your business, and you make capital gains make sure that the bank takes note. This will take some time, perhaps two or three years, but if you are consistent with the way, the money comes through; you will be in a superior position to increase the business tremendously. Normally, for you or be considered seriously, you need to be able to submit tax returns for a period of two years; this will give you an excellent bargaining chip, especially if your records reflect a diligently kept income sheet. You will also have your balance sheet with you, which are very pivotal for your bank to approve a mortgage for you. You should as well think of ways you can reduce more cost of your tax returns. You could be paying a lot of money in form of taxes, but if you can amend the tax in a legal way, you will put yourself in a position to ask for bigger mortgages. 

You should also think about ways in which you can lower your debt- income ratio. The current accepted ratio is about 45%. For those who are self-employed and relocating, the bank may set lower or higher ratios depending on the prevailing conditions. However, normally, they lower it to ensure that they get more customers. To active this, you need to pay as much of your debt as you can each time you are looking forward to getting another mortgage. Always opt for cheaper financing and each time you are offered a credit limit, see to it that you do not exceed more than two-thirds to be on the safer side. You should also learn to generate savings each time you are not consuming much of your money so that it can be your pillar when the time to bargain for a mortgage comes. 

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Schweinderl