It's fantastic to be your own boss! That is, until you need to persuade someone to lend you money. But, with a good plan and the help of your loan officer, you'll discover that buying a home is yet people dream you can realize.
Here are five things you can do right now to prepare for a mortgage:
Pay off your debts
In the meantime, try to pay off any other debts you may have, both personally and professionally. This will improve your credit score, which is used by lenders to determine how risky it is to lend you money. (Credit scores range from 300 to 850, with higher scores being better!) A high credit score makes it easier to obtain a loan, and you can frequently borrow money at lower interest rates, saving you thousands of dollars over the life of the loan.
Put in your time
Before applying for a home loan, most self-employed people work for their company for a couple of years. This will allow you to accumulate a longer history of tax and banking documents, which will provide you with sufficient proof that you can afford (and keep up with) your mortgage payments.
Set aside some money
Continue to save for a down payment on your home if you are able. The more you can pay in advance, the less you'll have to borrow. This makes you more appealing to lenders and saves you money in the long run.
Make a plan
If you own your own business, you most likely already have all of your accounts and financial records in order. However, because you will need to submit some additional information, you may want to create a new folder in which you keep copies of the documents your lender will require. In the following section, we'll go over what you'll need.
Consult with your lender
You do not have to wait until your credit score is over 700 or until you have saved up a 20% down payment. In fact, one of our knowledgeable loan officers can assist you in determining when you will be ready to buy, which may be sooner than you think! As the date approaches, they can also explain the differences between various mortgages and assist you in deciding which one is best for you. They will also make certain that you understand the documents required to prove your income. If you’re right now is still confused about loaning a home or car, salt finance is the right answer.
Salt Finance is a boutique home loan & car loan specialist helping hard clients to get a better deal, save interest and own their homes sooner. We are located at Mortdale, NSW.
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