If you’re a business owner, showing your earning before you can get a home loan won’t be as simple as digging out a pay slip. A self-employed or business owner’s income varies widely and can be complex than wage-earners, but this doesn’t mean that you can’t get good a home loan if you want to buy a property.
Here are a couple of tips to help make the process easier for you.
Consult your accountant. Before applying for a home loan, ensure that your finances are in good shape and updated. Talk with your accountant and let them assess your situation. They can assist by looking into aspects such as where you can claim work expenses as well as invoices.
If you have a personal or business credit card, review your lending and card limits since these will be used to calculate how much you can borrow. Consider reducing your card limit if it’s higher than what you need.
Manage your finances. A history of regular debt repayments and steady saving will make a positive difference to your borrowing power and credit history, therefore consider a budget plan to help you save as much as possible, so you can have a larger deposit on your property and borrow less. This saves you interest, plus makes it easier to secure a loan, and could also mean that you won’t need a lender’s mortgage insurance.
Prepare to prove your income. This step includes paperwork, so ensure that your balance sheets, tax returns, and loss statements are up to date since you’ll need your most recent financials to prove your income. Be honest about your personal and business assets. Take note that borrowing in your own name means that the money held inside the business structure won’t be counted in your assets unless you operate as a sole trader.
Base your property search on your capability. Many first time homeowners make the mistake of falling in love with a home that they can’t afford in the long run, so stick to your budget when hunting for that one special home. This will speed up the process and save you from heartache later on if you run into trouble with payment.
Talk to a lending specialist. Like many business owners, you are most likely time-poor, so a solo in-depth research can be unproductive. Most bank has agents on standby who can assist you with your queries and walk you through the steps in the borrowing process.
By looking at your individual needs, as well as the status of your business, a lender will be able to help you get a premium variable home loan or another package that’s right for you. Visit their website to learn more about the loans that apply to you.
Depending on your situation, it may only take a few days or even a few minutes to get conditional pre-approval on your loan, then you can officially start your property search. Now you can search with confidence knowing how much you can to spend.