It is difficult to obtain a mortgage if you are self-employed. Not only is it hard to prove your income and affordability, but you may also face a higher risk of being rejected or being offered an interest rate that isn’t very competitive. There are a number of things you can do to improve your chances of getting a mortgage.
Your credit history is one of the most important factors to consider. You’ll need to have a good credit score to get a mortgage, but your credit score alone is not enough. Lenders will want to see proof of income, so you’ll need to show them your last two years’ tax returns.
Another good way to improve your chances of getting approved for a mortgage is to pay down debt. Having a substantial deposit will increase your odds of finding a suitable deal.
You should also consider working with an experienced mortgage broker. This will help you to get the best product at the most competitive rates. If you do not have a good credit score, you can try to improve your score by applying for a secured credit card. Paying off your current debts and making payments on time will also boost your chances of approval.
Self-employed people have a high risk of being rejected because of bad credit. In addition, self-employed individuals often have irregular earnings. Since you are reliant on your customers to pay your bills on time, being rejected can be a real downer.
To increase your chances of obtaining a bad credit self employed mortgage, you’ll need to find the right lender. The most important thing is to understand the criteria that lenders use to decide whether to approve your application.
The “big three” are income, credit mix and repayment ability. Mortgage lenders will look at the aforementioned factors, and they will also take into account any other factors they consider relevant. These include your taxable income, length of time since you had bad credit and any other relevant life events.
For the credit mix, you’ll need to make sure you have at least a 10% deposit. This is necessary for any type of bad credit self employed mortgage. If you don’t have a large deposit, you may need to apply for a credit-builder loan.
While the “big three” are all important, you can increase your odds of getting approved for a mortgage by sticking to your credit limit and paying off any high interest rate credit cards. Also, you can check out your credit report to see if there are any errors. A few mistakes can affect your chances of getting approved, so correcting them will boost your chances.
In the same vein, the most important item to consider is your credit score. Even though it may not be the most exciting, having a high credit score will greatly improve your chances of being approved for a mortgage.
Getting a mortgage when you’re self-employed can be a daunting task, but there are some lenders who specialise in this particular niche. With a little knowledge and patience, you’ll be able to find a mortgage that suits your needs.