Getting onto the property ladder during the current financial climate can feel like a near impossible uphill battle you’re constantly trying to win. With the ever increasing cost of living, unpredictable futures and struggling businesses it’s no wonder that you’re worried about getting a mortgage as a self-employed business owner.
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Although it may be a valid concern of yours, all is not lost and there are options when it comes to becoming a homeowner. Getting a mortgage is possible for many business owners, simply because they are able to get their preparations in order in plenty of time.
When running your own business, you are used to organizing all of your affairs and juggling several different roles at once; getting a mortgage may be a similar process, but it’s certainly not impossible.
With just a couple more documents and meetings with the right people you can have your mortgage sorted in a flash. With that being said, you won’t be able to click your fingers and apply for a mortgage overnight.
You will need to prepare for this a couple of years in advance due to the complexities of being self-employed. Here are some useful tips to help you get prepared and become a homeowner even when you’re self-employed.
Check Your Credit Score
Having an idea of your credit score will give you a good indication about the type of journey you may have towards getting your mortgage. Your credit score will essentially show lenders what your recent history with money, payments and any outstanding debt you already have.
Essentially, you are looking to prove yourself as a trustworthy client who will be able to keep up with their repayments. All is not lost if your credit score turns out to be worse than you thought; it is definitely possible to get a self employed mortgage with bad credit.
Choosing the right lender, working with a trustworthy mortgage advisor and getting all of your financial affairs in order is the most important thing to remember. Lenders can be extremely understanding and lenient to those with bad credit scores, so don’t let it put you off from exploring your options and getting the process started.
Getting Prepared
Now is not the time to sit back and ignore any paperwork, tax calculations and spreadsheets you’ve been putting off for many months. This is your sign to get prepared and make sure that all of your financial affairs are laid out very clearly and in order.
Mortgage lenders will want to see at least two years of history from your business, so you need to make sure you have all of the accurate information regarding your previous earnings, profits, losses and expenses over the past few years.
As soon as you have gathered all of this information together, you will be in a very strong position to apply for your mortgage and start working with your broker to find the best possible lender for you. Although the process may be slightly longer than someone who works in a corporate role, all of the extra effort will certainly be worth it.
Work With an Accountant
Even if you don’t usually use an accountant to help with your business finances, now would be the ideal time to bring an expert in to help you get everything in order before you apply for your mortgage.
When you work with an accountant they will be able to help you prepare your finances in the best possible way. They can even write a letter to mortgage lenders explaining why you would be a good candidate for a mortgage.
If your business is complicated or there are intricate explanations regarding your income or expenses, your accountant will be able to explain this to them and show future forecasts for your business income too.
In an ideal world, your accountant and mortgage broker would work seamlessly together so that they are exactly on the same page when it comes to getting your mortgage application accepted.
Consider Using a Mortgage
When you’re looking to take out a mortgage as a self-employed business owner, you may want to consider using a mortgage broker. There are so many perks that go hand in hand with having a good mortgage broker in your corner, as it will give you a higher chance of finding a suitable lender for your individual circumstances.
A broker will be able to figure out how to use your income in the best way possible so that you are more likely to have a successful result. As every business is so unique and individual it’s likely that they will offer a very tailored approach so that you are likely to receive the mortgage offer you’re looking for.
Acquiring Mortgage as a Self-Employed Business Owner
When you’re taking out a mortgage as a self-employed business owner for the first time, you need to think about getting the best possible protection. There are a number of ways in which you can protect yourself such as life insurance, income protection and much more.
As a self-employed business owner this is more important than ever as it ensures that you are covered if anything should happen to you.
If you become seriously ill, you need assurance that you’ll be able to make your mortgage payments and continue to pay your bills if you’re out of work for an extended period of time. When you are working alongside your broker, you need to consider the right types of protection for your circumstances.
As you can see, there are a number of different preparations you can make when it comes to getting a mortgage as a self-employed business owner. Although there may be a few extra steps to complete, it will be possible for you to achieve your goals of becoming a property owner.
Whether you’re getting your credit score checked out or you’re working alongside a trustworthy mortgage broker in your local area, there is so much you can do to be successful in your mortgage application.
Hopefully, the advice mentioned above on acquiring mortgage as a self-employed business owner will bring you one step closer towards buying the home you want and deserve.
