Getting a Mortgage If You’re Self-Employed

Getting a mortgage can be a difficult task – and it tends to be even harder if you are self-employed. For many people who work for themselves, getting a mortgage can feel like a tough roadblock that is impossible to get past, but in reality there are some steps you can take to improve your chances.

If you are clued up about the different types of mortgages and what is available to you, you should be able to get a mortgage so that you can move into your dream home and maybe even use it as a base to work from. Here are a few straightforward ways to get a mortgage if you are self-employed. Make sure you get independent advice as this is probably the biggest purchase you’ll make in your life.

Getting a Mortgage If You’re Self-Employed

#1: Consider a pre-approved mortgage

One of the most frustrating things about looking for a new house is the fact that you have to compete with other buyers for the property. Where I live (in Sydney, Australia) house prices are through the roof and home buyers compete alongside investors with deep pockets.

Competition can be stressful for self-employed people as they may not be chosen over a buyer with a more consistent income, but a pre-approved mortgage will certainly improve your chances. A pre-approved mortgage is a mortgage that has been confirmed before you even place an offer on a house, making you seem like a more viable candidate. Many people wonder how to get preapproved for a mortgage, but it is fairly simple; you just need a consistent income and a good credit score. Speak to your broker and make sure you get advice from several brokers so you can compare what they suggest.

#2: Aim to improve your credit score

How’s your credit? If you want to boost the likelihood of being offered a pre-approved mortgage, you should try to improve your credit score, as a good credit score will increase your chances of being accepted for a mortgage.

There are lots of places online that you can use to check your credit score, but make sure to find a reputable website so that you don’t end up being charged. This will depend on where you are based, but a quick search should pull up some results.

Once you have found out your credit score you can start to improve it. One simple way to improve your credit score is always remember to pay your bills on time, and it is also important to pay any missed payments so that you are fully up to date. If you are unable to make payments contact your debt lender immediately, as they will help to spread payments out so they are more manageable. The worst thing you can do is ignore the problem, as missed payments will lower your credit score even more.

#3: Get your accounts together

One of the most essential things that you will need to do is get your accounts together for the last year, as the lender will need to see your accounts as confirmation of income. They will also use the information to help set out a payment plan that works for you.

Depending on your location, in the past, the government in some areas required at least two years of accounts, but the rules have recently become more lax (in some places) to make it easier for people to provide the relevant information, so now you only need to provide one year of records in many circumstances. Make sure to include person and business bank transactions, as well as tax payments and business expenses.

Getting a mortgage is not impossible if you’re self-employed

A mortgage isn’t just a dream for the self-employed; it is very achievable if you find a reputable loans company to help you finance. Just make sure that you have your credit score and accounts ready when you contact the loans company. Do all your research, make sure you get independent advice and don’t ever rush into anything.

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Getting a Mortgage If You’re Self-Employed
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Getting a Mortgage If You’re Self-Employed
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Getting a mortgage can be a challenge if you’re self-employed but there are many things you can do to increase your chances.
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Alyce Vayle | Content Strategist
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