How to Get a Mortgage if You’re Self Employed
Getting a mortgage if you’re self employed can be nerve-wracking, especially when you don’t know much about the process.
But this could also be easier if you have the right tips and know what help is available. The most available help is getting free advice from mortgage brokers on how to get a mortgage.
Fortunately, this article presents some essential tips for getting a mortgage for the first time. We shall also shed more light on what it takes to be approved.
- Start Saving for a Deposit
If you plan to buy a house for the first time, you should start saving for a deposit. Remember that your deposit will determine the amount of money you can borrow to buy a new home.
The more you save for a deposit, the higher the chances of getting access to more viable mortgage rates. Smaller savings for deposit mean that your mortgage will cover more of the house’s total value.
Usually, most lenders ask for a deposit of about 5% to 15% of your home value. If you are struggling to save as you should, you can find help from your loved ones.
In fact, leading banks such as Barclays have programs like family springboard mortgage that allows your family and friends to place a deposit you, without having them spend their savings.
Also, some lenders can avail mortgage deals with no deposit, like the guarantor mortgage that involves naming a friend or a family member on the mortgage. Here, the interest rates are usually higher.
- See How much You Can Borrow
As you continue to save, find out the amount of money you can borrow using a mortgage calculator. You can also get some pieces of free advice from mortgage brokers to know how it works.
It is also good to calculate how much you could pay for a mortgage every month and in total.
Generally, the amount of money you could borrow depends on your income, credit score, and other financial information.
- Find Out Whether You Qualify for a Mortgage
You can do this by getting an agreement in principle. The agreement in principle tells you if the lender can lend you the amount of money you need. It is also known as pre-approval.
Getting a pre-approval is simple and not as tedious as you may think. You can get it online, and it takes only a few minutes.
However, getting a pre-approval is not a guarantee that you will get your mortgage, but it will save you time at your mortgage appointment.
- Apply for the Mortgage
Before you make an application for your mortgage, experts recommend that you get enough advice about the process.
It is also wise to put your financial information in line. This will save you from delays common in this process.
Getting advice from mortgage brokers helps you to avoid unrealistic expectations for your mortgage.
Once you apply for your mortgage, the lender evaluates whether you are eligible for the amount of money you need. If you are approved, then you get your loan to buy your property!
How to Get Approved for Your Mortgage
When you apply for your mortgage, your lender will scrutinize the financial documents you provided to be sure of your income.
Based on your financial and personal situation, the lender recommends the mortgage they think is right for your property. Keep in mind that your credit history also matters a lot.
In most cases, the approval takes about 18 to 40 days and sometimes longer, depending on your circumstances. If you have higher credit ratings, your mortgage might be approved soon.