Four Things To Avoid While Applying For Mortgage As Self-Employed
With the recent change of rules, it is becoming more and more difficult to get mortgage approval as more down payment is required. The time period of a mortgage seems to have gotten shorter too. The 30-35 year time period for mortgages no longer seems to exist. The high cash down required to get your mortgage approved means tough times, especially for first-time home buyers. This is leading to more and more people having no choice but to rent a home, which too isn't easy with the soaring rental prices. One of the major factors in getting your mortgage approved is to show your income and to provide proof that you pay your bills in a timely manner. It is often the case that private lenders provide loans to borrowers who are self-employed. Such lenders look closely at statements or proofs of income, cash flow, and equity in the property. There will be plenty of tips on how you must navigate and meet the needs of the lenders how you get your mortgage approved. But what you must also know is what you must avoid and we discuss that below. Do not hide your income If you, as a self-employed borrower, get any payments in kind or cash instead of getting these by a check. This is okay as long as the income is shown on paper for tax-related work. But if this income is not shown or hidden then you are showing a lower income to lenders. Hiding will lower the chances of your mortgage approval as it means you have a lesser ability to spend and make payments towards the mortgage loan. Do not show a greater income Some borrowers are tempted to show more income than they earn in order to get the mortgage approved. Remember you need proof to show that inflated income. Even if you are able to do so, you will falter while making mortgage payments, and such a situation is best avoided. Do not hide your debts Lenders need to know your debt history in order to extend a loan to you and it is best that they are shown a clear picture of where you stand. The borrower would need to pay off the debts to quality and also need to reduce their expenses. Remember the lenders get to know about your debts even if you don't tell. So hiding the debts is a bad idea. Avoiding loans is not a great idea All lenders need to see if you have a good record of repaying your loans and they can only see this if you have taken previous loans or use credit cards. So not taking credit at all doesn't give the lender any idea about your abilities to pay back loans. Hence, take your loans and make timely payments in order to qualify for the mortgage. If you have any mortgage-related queries or are seeking to get your mortgage approved, write to us at LendX Financial in Brampton, Greater Toronto Area.