Selling one’s home and then taking out a mortgage loan for a new home is a major decision in anyone’s life and the situation is further complicated when one’s employment status isn’t necessarily cut-and-dry, as is the case with self-employed individuals. We’ve looked into what selling your home and then applying for a subsequent mortgage entails in the case of freelance professionals. In brief, freelancers needn’t feel compelled to switch to 9 to 5 jobs or alter their professional status in any way. They simply need to take into consideration certain specific considerations. Outlined below, the main legal and financial aspects you need to bear in mind.
The success rate of self-employed mortgage applicants largely depends on the amount they are looking to borrow. Several British banks, such as Britannia and ING Direct might be willing to grant self-employed professionals large amounts. A lot will also depend on the amount of money you make from selling your current home, and, in from this point of view, current trends indicate that selling your home online will save you significant amounts of money. You can read more here on how to sell your house online at My Online Estate Agent and you should also be aware that online sellers manage to save an average of GBP3,500, by sidestepping commission fees and hidden costs, often imposed by offline agencies.
Read also: HOW TO BUY A HOUSE WITH BAD CREDIT
Proof of Earnings
One of the main criteria that banks take into consideration when deciding whether or not to grant any applicant their desired mortgage loan is how much money they make. As such, professionals in the liberal field need to make proof of their earnings for a span of at least three years. Financial experts recommend that you wait for at least one year and see how your income averages out prior to applying for any mortgage. Those who have been making money in a self-employed regimen for three years or more should have no trouble whatsoever in applying for a loan. You would not necessarily need to bring proof from a formal revenue account-a simple statement from the HM Revenue & Customs authority will also suffice.
Self-employed individuals whose income is not taxed at source need to prove they have been filing their self-assessed tax return documentation on a yearly basis. Tax statements are also taken into consideration when applying for mortgage loans. There is no need for freelancers to consider switching work modes prior to applying for a loan, as long as they’ve got their taxes paid for and everything is in good order in that respect.