It is nice to be self employed. No hurry to reach the office by 10 a.m. sharp, no more abiding by the ridiculous rules set forth by your worthless and lousy senior and of course, no need to stay at late at office just to show that you are working your tails off. Ok let take off those rosy glasses for a second; time has come to face the real world headlong. Being self employed is not that amazing kind of thing. It has its own challenges and hopefully you have got it right. Aye, financial and banking institutions hesitate a lot while approving any loan because you are simply not associated with a top corporate organization.
m shift in lending policy of banks, as a self employed you will find it overwhelmingly difficult to be able to qualify for a mortgage loan. And you know what, you are squarely to blame for this. Do you remember how you have inflated your expenses last year in order to show less income? Of course, you do and this is what has further diminished your chances of being eligible for a mortgage loan. Want to learn more? Here go they:
You are hiding your income:
Yes, this is what we all do in order to save our money going to our Govt so that it can waste it better than we do. And sometimes, we go extreme and show that we have actually incurred huge loss and believe me this will make your life a hell lot tougher when applying for a loan. Think it this way; would you ever lend your money to someone who is actually making loss? Of course, you would not and the same rule goes for the bank and other financial institutions.
Lol, You are Unemployed:
Self employed can never be equated with being unemployed but when you are showing in your tax return form that you are not making any money at all, things start taking a different shape. To be precise, from a lender’s perspective, you are actually making it all the more difficult for him to offer you a mortgage loan.
Your Business is not Validated:
You need to have some sort of business license otherwise; it will get all the more difficult for you to be eligible for a loan. For say, if you are a real estate agent, you can easily apply for a real estate license or at least, you need to show the banking institute that you have filed self employed income tax returns in the last 2 years. That would also do.
Get your Document Ready:
No matter whatever the amount is, if it goes into your bank account, it will be counted as regular income and therefore it has to be documented. So, be careful about this.
Utilize Your Business Fund:
If your expenditures are being paid from a business account, the lender will then assess whether or not you will be able to use those funds to repay the to be borrowed amount. That means, you can present that business account as a part of your business model and also it will be treated as a part of your regular source of income.