Getting home loans can be a little tougher when you’re self-employed
Being self-employed might sound to many like a dream come true. After all, who hasn’t fantasised about being their own boss, setting their own schedule and controlling their own destiny at work every day?
The downside, of course, is there’s no promise of financial stability when you work for yourself. And because of this, it’s not always easy to prove that you’re on solid financial footing – which can be a problem when you’re at a major financial crossroads. Say, for example, you’re trying to get a home loan – can you still pull it off?
The inherent challenge of being self-employed
Being self-employed is liberating for people who like taking control of their own work lives, but it’s also immensely challenging. The main difficulty is that you don’t receive a regular, guaranteed paycheck – instead, you’re in charge of giving yourself a wage, which isn’t always easy.
When you’re self-employed, you have to think about not only your gains and losses each month, but your cash flow as well. Will you be able to actually collect the money you’re owed? If you can’t, that makes it difficult to make financial arrangements for yourself, such as getting self-employed home loans.
Getting a mortgage can be a bit tricky
When you try to get a home loan with a self-employed lifestyle, you’re likely to discover that it’s not easy. Bankrate reported that loan officers are often hesitant to trust someone who doesn’t have the stability of a real company.
“By definition, these businesses can be highly volatile,” said John Stearns, senior mortgage banker at American Fidelity Mortgage. “So if one year shows income and the next year shows half as much, that could be a problem. You want to show an increase from year to year to show that business is good.”
Even if your business isn’t the most stable, though, you probably still have options.
Perhaps the experts at Mortgage Choice can help
When you’re self-employed, you probably want the same thing that everyone else does financially – a sense of stability and confidence that you’ll ultimately be OK. One way to gain this confidence is to work with mortgage brokers who know how to handle unique clients, such as those who are self-employed.
At Mortgage Choice, we have a team of experts in place who are more than willing to lend their insights, on home loans and everything else. Reach out to us if you need help figuring out your options. We’ll try to find a solution that’s right for you.
