There’s a lot to be said for being self-employed. One misconception that many people have is that obtaining funding can be difficult. If you’re in the market for a mortgage, it’s true that some lenders make the process harder than others. It’s good to know that Clover Mortgage helps self employed workers to get mortgage loans that are straightforward and easy to manage.
A key part of finding the right mortgage is to be prepared. Keep these four tips in mind and you’ll be ready to supply lenders with whatever they need. The result could be a mortgage agreement that will be just right for you.
Gather Documents to Verify Your Income
Lenders will need documentation that verifies your income. If you use accounting software for your business, there are reports that will help confirm the amount of your income, the average aging of your Receivables, and the nature of your cash flow. Augment that with the information you provide to the revenue agencies. Bank statements will also help.
Many lenders provide lists of the type of financial documents they need in order to consider applications by the self-employed. Put that list to good use and make sure you have all of them on hand.
Order Copies of Your Credit Reports
Before submitting any mortgage application, it helps to know exactly what’s on your credit reports. Order one from each of the major credit reporting agencies. Your goal is to make sure the information is current and that it’s correct. Don’t be surprised if one or two creditors only appear on a single report. Some creditors only submit information to one agency while others submit to both. As long as the data is correct and up to date, you’ll be prepared to answer any questions the lender might ask.
Improve Your Debt to Income Ratio
Take a good look at the other debt you already carry. Lenders will look at the amount you already have to pay every month and determine how those obligations affect your ability to make timely mortgage payments. If you’re already struggling a bit, that indicates that the lender would take on more risk by doing business with you.
You can improve the debt to income ratio by paying down some of your debt. Target debts with relatively low balances and pay them of completely. Easing the strain on the household income will make you more attractive to prospective lenders.
Hone Your Household Budget
How concise is your household budget? Are there line items that could be reduced or eliminated altogether in exchange for adding a mortgage payment to the mix? If so, rethink the way you structure the budget and how you spend money. Setting realistic amounts for each line item and sticking with it will make it all the easier to demonstrate how you plan on paying the monthly mortgage payment.
You can become a homeowner, assuming your finances are in order and that you find the right lender. Start with Clover Mortgage services and see how things go. There’s a good chance that there will be no need to look anywhere else.