Tips to get the best self employed mortgage rate
Mortgage for the self employed is undoubtedly more complicated and difficult to acquire than the regular mortgages. Self employed borrowers must go through a different process than regular salary earners when applying for a home loan. The qualification criteria for self employed mortgages are also more stringent and severe when compared to the traditional mortgages.
If you are a self employed, following are a few pointers to improve your chances of securing a mortgage for self employed:
1.Offer a large down payment
By offering a large down payment, you pose less risk to the mortgage lender. He gains confidence in your financial health, and therefore, will be more willing to invest in you.
2.Improve your credit score
Just like other mortgages, a higher credit score will decrease your risk index in the lender’s eyes and improve your mortgage rate. Lenders, inherently, tend to consider self employed borrowers as credit unworthy. Thus, it becomes essential for you to maintain clean credit records by making prompt payments, clearing any long outstanding debts due, etc. The higher your credit score, the better are your chances to qualify for a lower mortgage rate.
3.Capitalise on your savings
Mortgage lenders are wary of providing loan to self employed people as they do not have stability in terms of future income. Thus, you will have to secure the mortgage lender’s faith by showing him that you have adequate surplus funds to fall back upon in case of any emergency. This way, even if your business faces temporal downslide or a slack period, you will be able to meet your monthly payments. Generally, a reserve of six to twelve months of monthly payment is considered as a decent security.
4.Have your documents in order
By providing complete document of your past years’ income through tax returns, audited balance sheets and profit and loss statements, etc, you will improve your chances of securing a mortgage for self employed. Remember, that the lender will adjust the interest rate according to the documents you present.
5.Consult a specialist
Specialists on mortgage for self employed will be able to comprehend the challenges and offer tips on how and who to approach for the best mortgage for the self employed. What more, they will also offer you competitive solutions to get the maximum tax rebate possible from your mortgage.
6.An established business
By showcasing your potential as a self-employed and the earning capacity of your establishment, you will be able to gain the lender’s confidence. They will be more willing to invest in an experienced self employed who knows the rules of his trade.
For more information, you may contact:
Allegro Mortgages Corp. – Best Broker for All Your Financing Requirements
Check out amortgages.ca/ for more information on different refinancing options.
Please visit the website Amortgages.ca if you are interested to learn more about mortgage for self employed. The site also provides valuable information about mortgages Thornhill and mortgages Richmond Hill.
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