The difference between getting a mortgage when you’re employed compared to when you’re self-employed
Getting a mortgage can be a daunting process, especially if you’re self-employed or own a business. Unlike those who are employed with a salary, self-employed individuals have to go through a few extra hoops to secure a mortgage.
For those who are employed with a salary, the process of getting a mortgage is relatively straightforward. Lenders typically use your salary to determine how much you can borrow. They will also ask for proof of employment, such as a letter from your employer, and they may require a credit check.
For those who are self-employed or own a business, the process can be a bit more complex. Lenders will want to see proof of income and will typically ask for several years of tax returns. It's important to keep accurate records and to be upfront about your income. You may also need to provide additional documentation, such as profit and loss statements or bank statements and possibly a financial forecast and earnings for the year to date, depending on the client and their business background.
But don't let the extra steps discourage you! There are many mortgage options available for self-employed individuals and business owners. Working with a mortgage advisor can help you navigate the process and find the best mortgage options for your unique financial situation.
At the end of the day, whether you are employed or self-employed, owning a home is a big achievement. With the right guidance and preparation, you can successfully secure a mortgage and move into your dream home. Drop me a line if you’d like some help navigating the process!