There is a common misconception that you cannot get a mortgage when you are self-employed. This is a completely business belief, and you should never pay heed to things like this.
In reality, mortgage lenders have nothing to do with your employment. Being employed or self-employed does not make any difference when your mortgage application is being reviewed for approval. However, you will have to manage your finances in a great manner if you want to get a self-employed mortgage.
Employed Vs. Self-Employed Mortgage
According to law, mortgage lenders are required to assess your financial stability before accepting your mortgage application. This allows them to understand whether you will be able to repay the mortgage or not.
Usually, employees of different companies find it easy to prove their income. Moreover, they have a specific contract of payment with their company. This allows the mortgage lender to calculate the amount of money the employee will have to dedicate towards re-paying his mortgage. That is why mortgage lenders usually approve the mortgage applications of employees relatively easily.
On the other hand, calculating your monthly profit when you are self-employed is a bit complex. You have to deduct all the taxes and bills from your monthly income in order to get your profit.
So, if you are looking to get your mortgage application approved as a self-employed person. You will have to keep your finances neat and tidy.
Organizing Your Finances
If you are looking to apply for a mortgage as a self-employed person, you should hire an accountant to organize your finances. Some mortgage lenders even require you to hire a qualified accountant to calculate your finances and provide them with your net profit.
This combined with a good knowledge of your finances will be good enough to get your mortgage application approved.