You might be aware of the struggles that come with home loan application procedure if you are self-employed. Yes, it is difficult for self-employed individuals to acquire home loan, but not impossible. Employed individuals can provide their income record and follow other regulations to acquire the loan. But this is not the case for self-employed applicants.
This article showcases some handy tips that can make your home loan application process convenient:
State Your Income Clearly
Your purpose is to get the home loan approved. So, there is no need for you to under-declare your income or try out some sneaky tricks to show less income. Every bank ha a different standard to ask for income declarations. But Inland Revenue Authority of Singapore (IRAS) tax returns and your Central Provident Fund (CPF) statements are the two most authentic evidences that you must provide to these banks.
Doing so not only increases your chances of getting the home loan approved, but also develops your credibility right away. Why not go for authenticity and transparency rather than adopting deceptive techniques that could land you in trouble later.
Always keep a proper record of CPF statements, IRAS tax returns, and at least three months of your payslips. Bank would surely ask you to bring these documents to prove your income. A well-prepared individual is the one who faces the least hassle.
Maintain a Good Credit Score
You are fully aware of the adverse effects of having a bad credit score. Imagine having a bed credit score for a home loan that you are applying as a self-employed person. It makes things even worse.
You must keep a thorough check over your current credit score and if you find out that you have miles to cover before getting a good credit score, then it is better to improve it first. You must start paying off all the debts right away.
If you are not aware of the ins and outs of having a good credit score, then you must hire a professional to assist you in the process. You must check your credit report for errors and get these errors removed before applying for the home loan. Once you become successful in making a considerable improvement in your credit score, only then you should opt for home loan application.
Apply for a Home Loan If You are Currently an Employee
Being an employee gives you an edge while applying for home loans. If you are an active employee and are planning to leave your job soon to start your own business, then don’t wait to get self-employed. You must apply for a home loan as an employee. Doing so would make it easier for banks to assess and authenticate your income from the last year.
If you become self-employed and then apply for a home loan during the first year of self-employment, then no bank would grant you the loan. You will have to file tax returns one year after self-employment and then the banks would assess these tax returns in accordance with their criteria. Why opt for a risky home loan procedure when you can easily cash the opportunity to apply as an active employee?
Don’t Hesitate to Get help from a Skilled Home Loan Mortgage Broker
Having a skilled professional by your side can reduce half of your problems and much of the effort. You have a business to manage. Not everybody has the time to get into this hectic procedure of a home loan. Hiring a home loan mortgage broker can prepare and manage all the required paperwork on your behalf and get in touch with the banks to approve your home loan easily.
Make your move now and take smart decisions to get your home loan application approved by the concerned bank.