Getting a mortgage is daunting even at the best of times. There is a lot of jargon involved and for some people, any issues related to money immediately get the stress levels rising. When you are self-employed and are dependent on yourself for your income, the process of getting a mortgage can feel even more stressful. But it doesn’t have to be. We have put together this guide with helpful tips inorder to help you through the process of getting that mortgage so you can buy your new home with as little stress as possible.
Showing Your Income Can Be Tough
Working for yourself can be excellent. You get to be your own boss and can set your own schedule. However, if you are your own boss, you are the one paying your paycheck. This can make things difficult when it comes to proving how much you earn. There is some excellent advice out there about how to go about proving your income, but these are the main points:
- If you are a limited company, then you need to have an accountant put together the paperwork that shows how much you earn. It is the only way to be absolutely transparent.
- If someone else has verified the numbers, your mortgage lender can sleep easy approving your mortgage.
- As well as that, you should make sure you have a good understanding of your income figures. You will be asked about them in more detail when you apply for your mortgage or approach a broker, so make sure that you are comfortable answering questions.
Don’t Forget Your Credit Score
Credit is one of the many ways you can prove that you are a responsible person. It is the paper trail (although it is usually all online) that tells people you pay your bills and you pay them on time. A good credit score is very attractive to a mortgage lender. A mortgage lender will check your credit score – personal and business- with your permission and this can be the key to getting your mortgage approved. Ensure that you have all outstanding debts paid off before this step!
Ask A Broker
There is a lot to think about with this process, but there is no reason that you have to do it all alone. Getting in touch with a broker will save you a great deal of stress and ensure that every step runs smoothly. They can be your expert in the field and can offer some excellent advice.
Keep All Your Paperwork Up To Date
It can be a challenge but if you are self-employed, being organised is a great trait to develop and nurture. As stated previously, you are your own boss. That means you are in control. Any business, account or electrical records should be kept up to date. We have also put together some advice on how to keep on top of your financial records. Keeping everything organised and updated regularly means that when your lender or broker needs this information, it is all to hand and makes the overall process easier.
Consider Hiring An Accountant
This is somewhat related to the previous two tips but can be really useful – hire an accountant. If you are struggling to keep on top of all your record-keeping, taxes and accounts, an accountant is the perfect solution. They will keep everything in order for you and make sure you have what you need when you want to submit your mortgage application. You do not have to do it on your own!
A Denied Application Isn’t The End
It is hard to experience a rejection and a rejection that can potentially impact on your future is even harder to take. Being rejected for a mortgage can sometimes make it more difficult to have an application approved, especially if you have applied several times. There are several reasons that you may have been denied a mortgage: missing or making late payments; you’ve been unable to prove your income; or even mistakes in your application to name a few. This is not the end though. You can ask your lender if they are able to give you the reason that your application has been denied. If you find this out, make sure that you fix what went wrong. If you do not actually find out what went wrong with the application, then make sure you space out further applications over time. Too many too often can make you a less attractive applicant.