For the longest time, the only case where you’d hear of self-employed people buying a home is if they ran their own business. Someone who managed a local public house or shop would of course be able to buy a home, but remote workers wouldn’t ever get the opportunity. There was something of a stereotype that many of them lived in council flats.
Due to advances in networking technology combined with the renewed focus on social distancing, more self-employed people are getting mortgages and buying homes than ever before. You can buy your first home too, even if you’re armed with nothing more than a steady income and a few simple pointers.
Best Ways for Self-Employed People to Buy Homes
Naturally, the best option would be if you could find a place that you can afford without taking out a mortgage. Unfortunately, that’s not always possible. Real estate prices have suffered somewhat as of late, but that doesn’t mean that it’s any easier for first-time buyers to afford homes.
Sole traders and those who manage limited companies can request professional self-employed mortgage advice from an individual advisor. This can help them find the best interest rate for their particular situation and prevent them from being taken by banks.
Financial experts currently don’t have a single list of lenders that help the self-employed. Business owners in Northern Ireland might want to go with a scheme that runs nationwide, but there’s no reason to avoid specialist self-employment mortgage brokers simply because they only serve a single county. Many of these services can offer a much lower interest rate than larger competitors.
Regardless of what kind of financial institution you decide to work with, you’ll need to be able to prove that you have enough income to avoid becoming a major risk. The records you’ll need to show in order to prove this differ somewhat between lending houses.
For instance, some lenders require customers to show a full three years of accounts in order to prove that they manage a profitable business. Others are more willing to lend to those who can only provide a single year of accounts. You’ll want to select the firm you do business with carefully. If you apply and get declined, then you could end up with a nasty mark on your credit score even if your business is making more money than at any other point in history.
Always aim for a reasonable price when you pick a home. Mortgage lenders are going to be more willing to offer you a loan for a lower price tag than a massive one. This is true whether you agree to a 30 year deal or not. Take some time to shop around for bargains. Depending on how long a particular home has been on the market, the current property owner may be willing to take less than their asking price.
While this might sound like a ton of work just to get your own home, the market is changing and that might very well work to your advantage.
How Entrepreneurs can Get a Deal on a House
According to statistics collected by a major UK-wide organisation, around 4.5 million people are self-employed. That’s nearly twice as many as were just 40 years ago. The financial system hasn’t kept up, however, since only 10 percent of loans since 2010 have been offered to the self-employed. That’s creating market pressure on financial institutions to offer better deals. It’s a great way for these lending houses to even things out and offer their customers a progressive image.
At the same time, property buyers are free to shop online and explore real estate markets in Belfast and other major metro areas. By taking the initiative and looking for a house by yourself, you can walk into a real estate agency armed with enough information to make a wise decision from the start.
Most importantly, though, you don’t want to overextend yourself. Sometimes a deal can look good when it really isn’t. Set a hard cap on how much money you’re willing to spend on a house. If your dream home doesn’t fit this limit, then move on. You might very well find a home that’s every bit as nice at half the price.
