Not everyone is working in an office. Some people prefer to work in the comfort of their homes, getting paid for their freelance jobs and commission-based work. While it may be unusual for some, the truth is, more and more people are shifting towards this work setup, especially when the pandemic made its presence felt across the globe.
With that said, you may find yourself in a similar situation, earning your wage in the past few months through a work-from-home arrangement. If you are backed by a 9-to-5 office, then you have nothing to worry about. However, if you happen to be working freelance or as a self-employed individual, chances are your options of getting your own mortgage may have been limited.
Why Is It Tricky for Self-Employed Individuals to Get a Mortgage?
Lenders usually require their borrowers to have a regular source of income first before even attempting to submit their mortgage applications. This certain pre-requisite may be absent from freelancers or self-employed individuals as their income doesn’t follow the regular scheduling and arrangement that standard offices have with their paydays. In such a case, they would have to go through the extra steps and preparations just to qualify for a loan.
As a self-employed individual, getting a mortgage can be a little tricky, but not impossible at all! Take note of the following pointers on how to qualify for a mortgage in your current work situation.
Be Updated with Your Tax Returns
Usually, lenders may require their borrowers to present their work payslips to check and analyse their regular source of income. However, this may not be possible for freelance employees. In that case, they will require alternative paperwork, such as tax returns and other tax assessments.
While this may seem like an immediate solution to what would otherwise be a frustrating problem, the disadvantage is that the lower the tax return that your income may reflect, the lower the amount that you may be given. Most banks are fickle about this specific process, so you should do your own research as well when it comes to picking out the right lender.
Be Updated with Your Payments
It’s not just about the money; it’s also about the borrower’s habits. If you want to make a good first impression, you have to make sure that you are not late with your payments. May it be your credit card debt or your other loans, you should show that you are trustworthy when it comes to borrowing money. If the lenders see that you have a spotless debt repayment record, they will be confident enough to give you a great amount.
Be Simple with Your Requirements
Yes, complying with a few extra steps may be confusing at times, but you must also see that your paperwork is simple and easily digestible. A lender will not waste time with paperwork that does not immediately show the details they are looking for. Always remember that the only thing that matters to them is that you have a regular source of income, and you are very trustworthy when it comes to paying back what you owe. If you check all these boxes, then feel free to summarise that through the paperwork.
Being self-employed may limit your options when it comes to getting a mortgage, but that doesn’t mean that you no longer have the chance to apply for one. It will only require you to take a couple of extra steps in order to submit your needed paperwork and requirements. So as long as you are able to present a viable source of income, a clear history of your past loans and a trustworthy reputation when it comes to borrowing money, you may be able to acquire a loan in no time.
If you need alternative mortgage lending sources in Sydney, then we at Wealthy You are more than happy to help you with that. We are an Australian mortgage company, and we offer a variety of mortgage solutions to make refinancing your home simple. Contact us for more information about our mortgage services.