Do Banks Give Loans to the Self-Employed?
Yes, banks do give loans to the self-employed! However, the requirements will differ, making it may seem difficult to gain approval for some. Banks will generally ask for proof of income through two years of financial statements and tax returns to get an idea of mortgage repayment risk and decide on approval status. A self-employed applicant lacking proof of income indicates a high-risk loan agreement to the bank and decreases the chances of approval. Self-employed potential borrowers may have more luck obtaining a home loan through mortgage brokers and lending specialists.
At Mortgage House, our professional lending specialists can assist self-employed applicants to find the best loan type available and walk them through the application process. Call and speak to our lending specialists today to learn about our various low-documentation home loans. Low-doc home loans allow self-employed applicants to apply for loans without the in-depth financial documents that most banks require.
Self-employed potential borrowers can also take various steps to boost their potential for a home loan approval. Lessening any personal debt an applicant may have, including high-interest-rate and credit card debt, can aid an applicant in obtaining a home loan. In addition, lowering any high credit card limits and closing unused credit cards can improve an applicant’s credit score and boost approval potential. Maintaining updated financial statements and tax documents is another way to increase a self-employed applicant’s potential for home loan approval.
Before you go, check out our Mortgage Borrowing Calculator to effortlessly check your borrowing power while also calculating and planning for future mortgage repayments.