Getting a mortgage as a business owner: What you need to know & do in advance
The home buying process can be long and challenging, especially for business owners. While owning a business is a dream for many, it comes with a few challenges one being irregular income. For this reason, most mortgage providers view business owners as riskier clients than traditionally employed people. However, you can improve your chances of getting approved by knowing and doing a few things in advance, for instance:
Get Organized Early On In the Process
While the process of getting a mortgage is almost similar to everyone, the difficulty for business owners lies mostly in proving income. Your lender will require licenses, records of your income statements and balance sheet, as well as tax forms, including a SA302 form. A mortgage broker can provide advice and insights into the process and all the requirements needed to help you address any issues early on and avoid surprise. In addition, you can hire a bookkeeper to help you prepare and record essential information a lender may need.
Ask Friends for Recommendations
The best way to prove a lender’s reputation is through its customers. So, did your friend, family member, or coworker buy a house recently? Were they pleased with the services of their mortgage provider? While you may not take every word at heart, it’s a good place to start comparing lenders. Your financial advisor or estate agent can also recommend a few lenders or mortgage brokers. Mortgage brokers like UK mortgage company Habito do all the legwork to get you the best mortgage fast and completely free. Be sure to keep a record of both the good and the bad companies.
Research Mortgage Options Online
You can obtain a wide scale of information about different lenders on the internet, including their rates and loan terms. You can use an aggregator and receive several quotes back, which will help you compare interest rates and loan terms. Just expect lots of phone calls from lenders who will now have your personal information. Using an online mortgage calculator allows you to know what price range to shop in.
Look For a Loan with the Lowest Rate and Best Loan Terms
Don’t be in a hurry to settle for a lender. In fact, compare lenders of different kinds, including banks, online lenders, local independents, and credit unions– to ensure you’re getting the best rates. Other than favorable interest rates, there are several other things to consider before taking out a home loan. So, ask lenders to break down all the hidden costs and fees including commissions, application fees, origination fees, appraisal fees, etc.
Narrow Down Your Options
After comparing different lenders, narrow your search to three lenders you feel comfortable working with. Then do more research on them by looking at reviews, or seeking the views of your financial advisor and real estate agent. You can also check to see if they’ve met certain conditions like: Were they friendly and patient? Were they willing and able to answer all your questions? Do you believe they were honest about their rates and the conditions for if/when they can change them? In the long run, your opinion matters the most as you are the one working with the mortgage provider.
Be Ready To Pull the Trigger When You Find the Best Deal
It’s best to take your time when committing to a huge financial responsibility such as a mortgage. However, timing is everything when it comes to finding the best mortgage, so don’t hesitate when you find one that fits your needs and offers lower rates and best loan terms.