If you are a self-employed worker, and would like to purchase a new property or remortgage, then you may have to deal with certain challenges that conventional “9-to-5” workers aren’t privy to. A quick way to help you get started is to use a mortgage qualifier calculator. It should also be noted that it has been more difficult, since the post-credit crunch, for freelancers, contractors, and self-employed workers to obtain a mortgage, but, as we shall see in this article, it is not impossible.
What You Will Need to Qualify
In order to qualify, you will need to basically prove your income to the mortgage lender that you want to apply to. In most cases, each prospective lender will ask that you provide a minimum of two years’ worth of tax returns or accounts. However, providing more than two years of accounts may actually help your case.
In any event, in order to get started, you will need at least two years of returns, a track record of routine or regular labour, an accountant to calculate the figures, a stalwart credit history, and a healthy deposit as well.
How Lenders Determine Your Loan Amount
Most lenders will determine how much they will lend you based on their calculations of your mean profits over the last few years. Also, most lenders will prefer that you work with an accountant, preferably one that is chartered or certified, before you apply for a mortgage with them. The accountant that you hire will help you prepare your worker accounts for you, and will ensure that all of your account information is up to date, as presenting out of date information to your prospective lenders may disqualify you because they may see you as a big risk.
If you are unable to procure at least two years’ worth of tax returns, then it doesn’t necessarily mean that you can’t obtain a mortgage. For instance, certain lenders will still consider your application if you are able to prove a track record of regular or routine labour.
Some may also consider your application if you have recently left your full-time job in order to become a contractor in the same field or line of work. At the very least, you will need to prove that you have a steady amount of work lined up in the not too distant future to even be considered.
If you would like to learn more about what you need to know about qualifying for a mortgage as a self-employed worker, then please visit our website or give us a call at 888-492-3690 for a free, no obligation quote and consultation.
At Northwood Mortgage, we offer our clients a myriad of different mortgage solutions and rates, including, but not limited to, residential first and second mortgages, commercial and industrial mortgages, variable rate mortgages, reverse mortgages, and low mortgage rates. You can also use our different mortgage calculators to help you determine if you will qualify for a mortgage as a self-employed worker.