Modern times have made it harder for almost everyone to move their homes using their hard-worked saved money. In case you want to keep your savings for some other purpose but you still plan on looking for a bigger place more suitable for your needs you have the option of getting a mortgage. If you already have one, in this article you will find more information about portable mortgages. If you do not have one and you wonder whether you can get a mortgage while being self-employed the answer is yes. Shortly, the information discussed in this article is based on the self employed mortgages subject and moving home mortgages, the costs involved when moving also what conditions are required to get a mortgage while being self employed or what you need to know when self-employed moving.
Self Employed Mortgages
Some of you may know how tough the entire process of getting a mortgage can be and you may imagine that if you are self-employed it can turn out to be close to impossible. It is not. It might be a little harder but it is not at all impossible. Getting self employed mortgages is considered to be tougher because proving you can be a good investment that affords to pay back the loan can mean providing at least 2 years of income information. If your profit is on a continuous rise this could be considered an advantage by most lenders and you can apply with only one year of income proof . The most common way for the income to be assessed as a self-employed company director is the salary plus dividends.
You will not be asked to put down a larger deposit than an employed person and you can be classified as self-employed if you own at least 25% of the business involved. Your business has to run for at least two years before completing a mortgage application and most lenders would like to see some proof of that timeline.
Interest Rates for Self Employed Mortgages
Interest rates for self employed mortgages do not vary from the employed ones. The only aspect that is different is the way the income has to be assessed. Besides that, you have to provide the information necessary to fulfill the application unlike in the employment situation where a broker can verify and acquire all the paperwork needed from the employer. There might be more documents needed in this case and more aspects to be taken into consideration but the interest rates are the same.
Self Employed Mortgages Rules
While this type of loan is pretty common there are some rules to be taken into consideration and checked before applying for a mortgage:
· Check your credit score . A high credit score can guarantee a successful application.
· Credit history has to be provided.
· The amount of your current debts. In case it shows you have to pay more than your income this can be considered a problem and your application may get rejected.
· In case your business is open more recently than 1 year there is a high chance you will not be considered eligible for this loan.
Moving Home Mortgages
There are two options regarding moving home mortgages . You can either apply to get a remortgage with your lender or another one, or you can move your current mortgage over to the next property, an action called porting a mortgage. If you are not sure about which option would better suit your needs you can contact a mortgage broker that can help you assess the situation and find the best choice in your case.
Regarding moving home mortgages, porting your current contract to the new property can be a beneficial move to make in case you are content with the deal you initially got. You will have to go through the entire application process again and you might be required to increase its size to cover the whole cost of the new property in case it is bigger or it is located in a more expensive location than the one before. In this case of having to increase the loan’s amount, your broker will inform you that taking out a separate mortgage to cover the difference is the best move you can do. This can add extra fees so it is best to talk to your broker first and find out which is the best option to avoid higher interest and additional fees.
Moving Home Remortgages
The process of remortgaging allows you to replace and take out a new loan with either your current provider or a new one. In this way, your rate can be recalculated and a better deal can turn out for you. Sometimes extra costs are involved. You might have to make an early repayment cost of up to 5% of the total loan. The percentage normally depends on the time left on the current contract. The closer the term ends the lowest amount you have to pay. In case you are on your lender’s variable rate, this might save you from paying this cost. Another possible unexpected cost can be the exit fee. It is important to look more into these details before filling out an application.
If you want to find another lender while getting moving home mortgages you need to know that these fees have to be paid for ending a contract in mid-term. Also, additional arrangements and evaluation fees will be applied to your new contract.
Costs and How to Cut Them
While moving home mortgages can be stressful it is also a pricey process. There are a lot of fees involved from estate agencies, property surveys that have to be made, more mortgage arrangements, solicitor’s taxes and so many more. You can try and make some calculations to see where you are standing first and check what actions you can take in order to cut some of them. For instance, if your mortgage deal is fixed-rated you should wait until the ending term so you can switch to a variable rate.