Posts Tagged ‘Own Business’

Self-employment and Home Loans

March 3rd, 2010 19 Comments
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In these highly uncertain times, the best way to go maybe is to venture out on your own and be self-employed.  Either you simply offer your services and skills to others on your own terms, or set up a business where you are the boss. The main advantage is that you make your own time, decide on your own pace, dictate and decide on what to work on, and generally if business is good, make more profits.

With respect to home loans and self-employment, you likewise get a mixed bag of benefits.  For those who have just started out their own business, and has no proof of income, often there is no choice but to simply get a low doc loan.  These are loans which require minimal documentary requirements, but generally have higher interest rate.  Because of the numerous documents banks and lenders often require of businesses to reduce their risk, there is usually no way for newly formed businesses to provide the necessary information in order for them to qualify for the other loan types which generally have lower interest.

However, just because you have started a new business and are self-employed does not mean that you have to wait.  Low doc loans may have higher interest rates, but with the number of low doc loans out there on offer, with the right information and documents, you may be able to get a low doc loan that is value for money.  This is because not all banks and lenders think alike.  Your business may be new but if your field of business is one that is booming and the demand easily outstrips the supply, then you may get a good deal on your loan even if you are new.

Talk to the experts and they can provide you with sound advice on what loan should be right for you.  Where you have an established business already, then you could do away with the low doc loans, and get a regular loan by providing the necessary documentation.  Where your business has good consistent profits, and a good track record this should not be a problem at all.  Just bear in mind that with the number of home loan products out there, it should not be very difficult to find yourself a loan that is right for you and your business and meets your budgetary requirements.