Self-employed professionals are not always lucky when it comes to getting approved for mortgages. The strategies mortgage companies apply to approve self-employed professionals for a loan is way complex. In other words, even if you run an established and profitable business, it won’t be easy to get a mortgage. Here are some of the best tips for getting a mortgage when self-employed.
Stable Credit Picture
The stability of your credit picture is a core determinant on how much you will get from a mortgage provider. Business owners with good and high credit scores will likely get more mortgages at lower interests. While those with low credit ratings will still get their desired mortgage amounts, the interest rates will be extremely high. Before you take the bold step to apply for a mortgage, you have to evaluate your credit score and reports. Make sure you fix any errors. Don’t close your credit card accounts since they may also play part in determining whether you qualify for a mortgage loan or not. Presenting your mortgage application papers before a mortgage company with a stable and clean credit report increases the odds of the loan being approved.
Get the Right Documentation
The mortgage application is a long process requiring tons of documents. Two years of standard federal tax returns document is one of the must-have documents. You must as well present a list of your documents for your liabilities, assets, brokerage accounts, and retirement benefits documents. Profit and loss statements will as well be important documents to present. Get a recently signed letter from the accountant to prove that you are still operating. With all these documents, you are likely to get approved for the mortgage when self-employed.
Higher Down payment
As a self-employed professional, paying more down payments can give the mortgage provider some assurance that you are ready to meet the agreed payment plans. While applying for the mortgage, make sure you outline a higher down payment. Doing so will increase the chances of getting the loan approved. That’s true since it acts as proof that you are ready for the loan and willing to pay the loan as agreed.
Self-employed professionals who want mortgage shouldn’t make the process longer by doing things the wrong way. Knowing what the lender wants before you go ahead to fill in the application form is important. We have given you all the information you need to know about the documents you should provide while applying for a mortgage. Making sure you carefully fill in your mortgage application form and attach all the provided documents will do you lots of good. There are lots of other important tips to watch out for when applying for a mortgage when self-employed, some of which are outlined in this post.