A fifth of freelancers have considered full-time employment in a bid to improve their chances of getting a mortgage, according to a new survey.
The research found that 73% of freelancers believe mortgage lenders will discriminate against them due to their employment situation.
Although being self-employed can certainly make it more difficult to obtain a mortgage, it doesn’t make it impossible. Here are just a few ways to increase your chances.
Use a mortgage broker
A good mortgage broker will compare dozens - and sometimes even hundreds - of mortgage products from across the market before highlighting the most suitable and cost-effective ones for you.
They’ll take your income, expenses, deposit and credit rating into account and steer you in the direction of the lenders most likely to approve your application.
This can be particularly helpful when considering the impact that a rejected application can have on your credit rating. If you apply for a mortgage with a particular lender and you’re turned down, this will be recorded on your credit file and it could impact further applications. With the help of a broker, however, this can often be avoided because the broker will have a thorough understanding of the market and is likely to know which lenders are particularly fussy when it comes to self-employed borrowers.
Put down as large a deposit as possible
Although saving a large deposit is much easier said than done, the healthier your deposit is, the more likely your application is to be approved. Therefore, if you can increase your deposit amount by cutting your spending in the months leading up to your application, this will help.
Improve your credit rating
Lenders will take a close look at your credit history before deciding whether or not to lend to you. Before applying, check your credit report for errors and make sure it’s an accurate representation of your financial history.
Use an accountant
Having a certified or chartered accountant manage your books can be a great help when applying for a mortgage. In fact, many lenders will reject applicants whose accounts haven’t been signed off by an accountant.
If you’re self employed and you’d like help improving your chances of getting a mortgage, please get in touch with the team at TaylorMade.