It’s not always easy to get approved for a mortgage, especially when it comes to being self-employed. However, it doesn’t mean it’s impossible, especially not here at Dominion Lending Centres NasaKasa. Many lenders often view self-employed individuals as higher risk because their income can differ from year to year. Mortgage lenders would want to ensure that you are always on time when making each mortgage payment. Here are some of the tips we recommend considering for getting ready to take the next steps in becoming a self-employed homeowner.
1. Maintain good credit score:
A good credit score is always recommended especially when it comes to mortgages, and there are a few reasons why. Having a higher credit score can impact your chances of getting approved and determine your mortgage rates and terms. A higher score can help you qualify at a lender that will offer you lower fixed rates and variable rates for your mortgage. A low score will limit the size of the mortgage, the chance of not being approved by some lenders or forcing you into a high-interest mortgage. If you need help understanding credit scores or need help fixing yours, please give us a call; our front desk staff would love to help you in any way they can.
2. Hire professional accountant:
Typically lenders would prefer the accounts to be managed by qualified accountants, so you may need to rethink the strategy if you have been doing your accounting. It shows credibility and transparency and lenders are assured that you are abiding by the latest income tax laws. It’s an excellent time to get your bills and statements in order when you start thinking about applying for a mortgage. Lenders will need your tax records to use an average of two years of income.
3. Start saving for down payment:
Saving up that much on a house can feel overwhelming. You can always start small. If you have savings, you can utilize it towards the down payment. A larger down payment means higher equity and lower loan to value ratios that reassures the lenders that you will not default on the mortgage during a financial crisis. It can help you to enjoy the benefit of a lower interest rate, resulting in significant savings over the mortgage life. Additionally, aside from the down payment, showing considerable savings will also aid you in being approved for the mortgage.
4. Work with a mortgage professional:
Another smart move when considering taking steps to apply for a mortgage is to speak with a mortgage professional. At Dominion Lending Centres NasaKasa, we have a team of knowledgeable professionals who can help you get the best mortgage for your situation. A lender may qualify you for a higher mortgage loan because that you cannot afford. However, a mortgage broker will know your financial goals and guide you only to borrow the amount as per your requirement. Your mortgage broker will have access to more lenders, compared to a traditional bank or credit union. Even if you end up going with your bank, speaking with a mortgage professional is advisable.
5. Proof of income:
The lender requires proof of income, and it becomes difficult being self-employed to prove your income. If you get paid cash for your business, we highly recommend depositing the funds into your business account to show deposits of income generated regularly. The lenders will also need proof of your self-employment in the form of either a master business license or articles of incorporation; you have to be careful that these documents aren’t expired.
Dominion Lending Centres NasaKasa
At Dominion Lending Centres NasaKasa we have experience working with self-employed professionals and can help you with every aspect of the mortgage process – call us at 905.997.7001 or email us firstname.lastname@example.org today to discuss your mortgage lending needs. We are mortgage brokers in Mississauga with over 30 years of experience in the mortgage industry.