3 Successful Ways to Get a Mortgage When Self-Employed
3 Successful Ways to Get a Mortgage When Self-Employed
Being prepared and having all the necessary documents when applying for a mortgage is important. With these tips, you can secure a mortgage and achieve your dream of homeownership.
Successfully getting a mortgage as a self-employed individual is more challenging than it is for those with a steady income. You may need a consistent salary or a regular pay stub to show the lender. However, there are still ways to secure mortgages. Let's discuss three successful ways to get them when self-employed.
Provide a Larger Down Payment
One of how you can increase your chances of getting a mortgage when self-employed is by providing a larger down payment. The larger it is, the less money you will need to borrow. This will lower your risk factor and increase the lender's willingness to approve your mortgage application.
When you are self-employed, doing this can be a good way to show you are financially stable and capable of making regular payments. It can also reduce the risk of default on your part, which makes you more attractive to the lender. So if you want a mortgage when self-employed, consider saving for a larger down payment.
Show Consistent Income
Even if your income is not steady, you can still show and guarantee the lender that you have a consistent flow of income. This can be achieved by providing your tax returns over the last two years, financial statements, bank statements, and other documentation that state your income.
When you are self-employed, keeping your financial records current is important. This will help you provide accurate data to the lender and show that you are a reliable borrower. Track your income and expenses, ensuring your financial statements are accurate and current. This will help the lender see you're financially responsible and capable of making regular mortgage payments.
Improve Your Credit
A high credit score makes it likelier to acquire a mortgage when self-employed. If your credit score is low, you take steps to improve it before applying.
One way to improve this is by paying your bills on time and in full. This will show the lender you're financially responsible since you make regular payments. You should also avoid applying for credit cards or loans you do not need, as this lowers credit.
You can also reduce your debt-to-income (DTI) ratio. This is the debt amount you have in comparison to your income. If it's high, that can lower your credit score and reduce the chances of getting a mortgage. It helps pay off debts before applying for mortgages as much as possible.
THE BOTTOM LINE
A mortgage when self-employed can be challenging, but it is not impossible. You can increase your likelihood by providing a larger down payment, showing consistent income, and improving your credit score. Being prepared and having all the necessary documents when applying for a mortgage is important. You should also shop around and compare different lenders to find the best rates and terms for your needs. With these tips, you can secure a mortgage and achieve your dream of homeownership.
Are you an entrepreneur or tech executive considering investing in property but concerned about having enough funds for living expenses and other investments? We offer comprehensive revenue and real estate purchase consulting and complete financing solutions tailored to self-employed individuals. Our services aim to dispel costly misconceptions and help business owners, investors, and newcomers access mortgage financing quickly and efficiently. Join our online masterclass to learn more about mortgages in Canada!
Level Up Mortgages is a mortgage broker team focused on helping the self employed, new immigrants, non-residents, and investors, access best rate and alternative lending in Canada. We have been nominated for best up and coming broker in Canada in 2021 and have been on CTV News and various publications because of our education-first approach to helping you always stay a step ahead of the process. Reach out to us for access to our first-time buyer course or a mortgage strategy session.
See What You Qualify For Or Contact Paul To Get Your Pre-Approval.
Paul Davidescu (www.levelupmortgages.com)
Level Up Mortgages
604-809-3188
paul(at)levelupmortgages.com
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