Getting a mortgage is hard for the best of us in the steadiest of jobs, so if you’re a self-employed person it’s even harder. However, it doesn’t mean you can’t get a mortgage and it’s not nearly impossibility with a little preparation. So, let’s take a look at how you can make your mortgage application successful as a freelancer.
Get a Broker
Dealing with banks and companies alone can be quite intimidating as a freelance worker. A lot of the more established banks and other lenders don’t have great terms and conditions in place for the freelance worker. This means that you can end up getting bad terms because of their issues with lending.
However, using a broker can make things a lot easier when it comes to lending. Many alternative lenders see freelance people to be only as much of a risk as others and so you will get a better deal on your loan. This stops you having to waste loads of money and it’s certainly a good idea if this is the route you intend on going down.
It’s a case that the higher the deposit, the better your mortgage will be. The days of full mortgages are gone and even though it’s possible to get a 5% mortgage, the more of a deposit you have the better it will be the deal you will receive. Better deals in the world of mortgages in general are reserved for those with a larger deposit, so you will need to get saving. Having a higher rate will also mean that sellers will be more interested in your bids too, making it easier to get the home of your dreams.
The credit rating is also very important and can really make a significant difference to your application. When it comes to mortgages or any form of credit, the rating is almost god. So, begin by paying off your bills and direct debits on time and get registered on the electoral roll. In addition, use a facility to keep an eye on how it’s going and check regularly to see how to improve.
Keep a list of your current freelance contracts. Companies that will potentially lend will want to see these and you will need to keep them up to date. Keep tabs on the length of the contract, rate of pay and all the other details as these are all used to support your mortgage application and are very important.
When you get your fee for how much the bank will lend, don’t just decide to move straight on board and take advantage of the highest amount possible. Affordability is a very important factor here and can make a big difference. If you don’t take this into account you’ll end up with issues and may need to sell a home quickly, or see foreclosure if you can’t afford it. Even though there is now more chance of selling your property fast – it’s not an ideal scenario to be in.
Be realistic and calculate how much will be repaid each month if interest rates increase or other variables occur.
These tips should help you get a mortgage if you’re a freelance worker and want to get onto the property ladder.