Posts Tagged ‘mortgage credit’
Be approved for a mortgage is still something very difficult. Banks have gone from one extreme (lending money to anyone) to another (not wanting to lend money to almost anyone.) But people with good credit, stable jobs, high income, savings to put a down payment and bank which participates in the programs of Fannie Mae, Freddie Mac or FHA have a good chance of being approved. But what if you are an independent contractor? Or if you own a small business? Is it possible to be approved for a mortgage at this point?
Why banks do not want to approve independent contractors and owners of SMEs
If the bank lends you money to buy a house they want you to pay your dues on time. Point. They do not want anything else! To pay on time month after month for 15 or 30 years requires a steady income. The banks believe that a salary generated by working with a company is more stable and secure income that comes from being an independent contractor.
Like most ventures fail, they take the position that there is a high possibility that the self-employed person fails to your business. If that happens, you can not pay the fee. To some extent they’re right. But the reality is that economic trends show that there is not very stable when you can stay employed because of earnings at any time.
Do you want the bank will approve your mortgage?
If you want to buy a house and you are independent contractor or owner of an SME, you have to accept the reality that will be harder for you to be approved for a mortgage. But if there are things you can do to maximize the chances of being approved.
Wait for your business is two years old
If your business does not have a minimum of two years in operation, leaving you better wait because almost no bank is going to seriously consider. The banks require a minimum operating history of 24 months.
Have all your documents organized and existing
Although this sounds obvious, most entrepreneurs fail to this point. If your business is a corporation, do you have the statute? Do you have the certificate of incorporation? Do you have the latest tax returns? Do you have your financial statements for the past two years? Do you have your account statements for all accounts of the business?
In addition, you must have all personal documents that are required for any mortgage.
Avoid online mortgages
One gets online mortgage or by phone may be good but for people who have a standard profile. The self-employed person does not have a standard profile. You do best to go in person to local banks. Even better would be to apply for a mortgage from a local bank already knows you because you have worked with them for many years for personal reasons or business. Some local banks have an expert specialist in mortgages for self employed people.
Choose between providing personal or real guarantees to support a mortgage can avoid surprises when to sell a property.
During the last decade has seen a boom in housing sales. The mortgage has been, in most cases, the instrument used for financing the purchase of a property and, in many of these situations, buyers need a financial support guaranteeing payment of all and each of the shares of mortgage credit.
The figure of the guarantor becomes very important and it became almost imperative for young people, workers with low salaries, mortgage applicants in excess of 80% of the valuation of the floor or people without steady work. Many of those who, in turn, signed as guarantors of their family or friends are now wondering if they can offer to sell their property or whether, on the contrary, their status as guarantors of a loan of not holding them from freely of their heritage. The choice between providing personal or real guarantees to support a mortgage may be the key to making a property sale.
Personal guarantee
Often the figure is often confused with that of the guarantor “no mortgager debtor, so it is important to differentiate the two terms and know what each means before making a decision to support a mortgage.