Preparing to get a mortgage if you are self-employed.
Ask, reflect, decide
When you are self – employed it can be tempting to think a good time to apply for a mortgage is when business performance is at its peak. Especially if you have squirrelled away sufficient personal savings for a deposit and legal fees, or earned enough through dividends recently.
Guaranteeing business performance in years to come is a different matter. Whilst the going may look rosy now, what will things look like in the next twenty or twenty – five years? No one can look that far into the future. Even with a sizeable deposit, the question is, can you realistically afford a mortgage? Lenders will want to be satisfied borrowers can make repayments.
- Be honest about business performance in good times and bad.
- Take time to review accounts for the past three years.
- What does the current sales pipeline look like?
- Do you have a record of regular contract work you can use to your advantage?
- Are any contractual agreements guaranteeing longer – term income in place?
- Are you planning to buy to let?
- What are the current market conditions?
- If you have experienced issues with personal credit in the past, were they resolved? (Obtaining a copy of your credit record will enable you to see your current score and settle any unresolved agreements or disputes).
- Have you received any professional advice from a qualified financial adviser?
All of the above will help you decide if the right time to apply for a mortgage is now.
Do the maths
It does not take a crystal ball to work out if you can afford a mortgage. In addition to using a mortgage calculator, professional mortgage advice assists in explaining broader complexities of different types of mortgages, legal fees and implications of long – term mortgage debt.
Newable Commercial Finance have a team of experienced, highly qualified mortgage professionals, who can help you to explore and discuss the finer points of your mortgage options.