Have you ever wondered about the ins and outs of getting a mortgage when self-employed?
Well, wonder no more! We’ve got the information right here…
The myth: Horror stories about self-employed mortgage applications have circulated, but the reality is more promising than you might think. While the process may seem trickier, armed with the proper knowledge, you can navigate it smoothly and confidently.
How does self-employment affect your mortgage journey? Being your own boss in Chelmsford has undeniable perks – flexibility, control, and earning potential. But when it’s time to secure a mortgage, it’s crucial to understand how lenders view self-employed applicants differently.
Income stability: Unlike a salaried employee, your income might fluctuate as a self-employed individual. Lenders want assurance that you can manage mortgage payments, making income stability a key factor.
Tax impact: Your tax strategy matters, too! Deducting expenses can lower your taxable income, but a lower income might affect your mortgage application. Balance is key!
Lender criteria: Remember, every mortgage provider has unique criteria. Some might specialise in assisting self-employed applicants, making the process smoother. Offers and rates can vary – exploring options is vital.
What do mortgage lenders look for? Here’s the rundown for self-employed mortgage success in Chelmsford:
- Bullet-proof income: Show at least two years of accounts (sometimes three), including your SA302 forms and company accounts, to paint a clear financial picture.
- Business stability: Prove consistent income and a solid business plan to positively influence your application.
- Good credit score: Maintain a solid credit score to showcase your creditworthiness. Check for errors and keep debts manageable.
- Healthy deposit: A deposit of at least 20% will show your commitment as a borrower. (although some lenders will consider as low as a 10% deposit)
- Affordability assessment: Showcase your ability to handle mortgage payments by optimising your finances beforehand.
Before you apply for your mortgage, keep these tips in mind for a more straightforward application.
- Sort your financial docs: Maintain updated personal and business records for a smooth application process.
- Save a substantial deposit: Boost your chances with a sizable deposit to reduce lender risk.
- Describing your business: Be ready to discuss your business model and growth plans.
- Mortgage brokers: Seek assistance from brokers familiar with self-employed income for expert guidance.
If we haven’t frightened you and you ready to dive into your self-employed mortgage journey in Chelmsford, then we’re here to help you every step of the way. Connect with us for trusted advice and support. Your dreams of Chelmsford homeownership await!
For personalised guidance and to make your dream home a reality, call us on 01245 835859.
Let’s turn your Chelmsford dreams into keys in hand! 📞🔑
PS The law says we must give this statement when we talk about mortgages: “Your home is at risk if you do not keep up repayments on a mortgage or other loan secured on it.”. There you go – that wasn’t that bad, was it?? Yet it is an important thing to remember.