Just because you are self-employed doesn’t mean that owning a home is going to be out of your reach. I work alongside a variety of lenders who love to help self-employed entrepreneurs get into the homes of their dreams, and you could potentially be approved for an excellent self-employed mortgage in Victoria, BC within a matter of weeks.
Understanding the Basics of a Self-Employed Mortgage
When a lender is taking a look at an application for a traditional mortgage, one of the most important variables is the applicant’s income. That includes the amount of money that they are bringing in every month as well as how consistent their paychecks are. For a self-employed applicant, the lender will need to consider a variety of other factors, such as the total value of the business, how much it brings in, the applicant’s savings, and their personal assets.
Benefits of Self-Employed Mortgages
- Break the Renting Cycle: It is an unfortunate fact that many self-employed individuals are stuck in rentals because they can’t qualify for a traditional mortgage from a major bank. I work with over 60 lenders, and many of those companies love to help dedicated entrepreneurs.
- Improved Net Worth: When it comes time to take out a loan for your business, the lender is going to take a very close look at your finances. Even if your personal assets are separate from your business assets, your net worth and credit score could still impact your ability to get a business loan.
- Flexible Payments: Mortgage payments are more flexible than ever, and approved applicants have many different options to choose from. We can either help you pay off your home loan as quickly as possible or set you up for a long-term mortgage with lower monthly rates.
What Are the Requirements?
The requirements for a self-employed mortgage vary between companies, but most of those lenders are going to have relatively similar guidelines. To determine your income, they are going to take a closer look at your taxes for the past two or three years. With that information, they will determine your average monthly income. They might also ask for a slightly higher down payment or analyze your personal assets if your average monthly income isn’t ideal.
The Application Process
During our initial consultation, we are going to go over exactly how these loans work and what you can expect in the coming weeks. As a general rule, a self-employed mortgage will take around 45 days to approve, but your application process might take longer if more information needs to be handed over to the lenders. Once you have been approved and found the home of your dreams, the funds will be transferred over to the seller.
Where Do I Go From Here?
If you are self-employed but scared that you might not be able to buy a home, then I encourage you to contact me today. I understand that this process can seem overwhelming, but I have helped many self-employed entrepreneurs through this process. My support staff and I work with over 60 amazing lenders, and one of those companies could help you achieve your goal of owning a home.
Frequently Asked Questions
How many years’ of taxes will the lenders look at?
This changes between lending institutions, and the type of mortgage product that you are applying for is going to play a role as well. As a general rule, you can expect each lender to ask for at least two years of taxes.
What if my income fluctuates between months?
While an unsteady income might have been a deal-breaker in the past, lenders know that many people work multiple jobs and have side gigs. It is possible to qualify for a home loan even if your income fluctuates.