Flexible Mortgage For Self Employed

There are many kinds of flexible mortgages that you can choose from, but you may not know which one is right for you. Here are a few things to consider and maybe a tip or two.

1. What Is A Flexible Mortgage?

These mortgages can be easy or hard to get, depending on what you are using to get them and what your terms may be. You may also want to know the particulars of what they are.

A flexible mortgage for the self employed can be defined as a mortgage that is given to a person who is self employed for purchasing a house or a commercial property. Simply put, these loans are used to purchase a house to live in, or a building to run your small business from, if you are, in fact, the owner.

These loans can be given on the basis of credit or on your income or a combination of both. The way you do your loan can impact how it can be used and what the terms could be. As stated before, you will need to know your credit rating and if you plan to use your income as part of your loan.

2. Where To Look

There are many places to look for a flexible mortgage when you are self employed. One of those places is the Internet. You can find many options for a mortgage even if you are self employed. The terms may vary depending on what you are willing to use as your income and what your credit score is. Looking online will offer you a wide range of options for your mortgage, and you can compare the rates and terms of different companies easily and quickly.

If you would rather speak to a person face to face, then you can look to your local mortgage company or bank. A mortgage company may be able to get you very comparable rates for your flexible mortgage. This will depend on many factors that pertain to your credit, payment history, and income. You should check with your mortgage company if you have any questions. You can also try your personal bank. If you have banked with them for many years, you may have the option of getting your mortgage though them. This is a great option if you already have your small business account through them and are in good standing.

3. Home Mortgages

The most used flexible mortgage is that which is used for the purchase of a home. These mortgages are often easier to get than a commercial one and have some better terms.
These home mortgages are flexible mortgages that self employed people can use to purchase a home. Many things can affect your loan and how you might receive it. You should research how you may be affected by these terms, so you can find the best flexible mortgage for you and make sure that you can meet the terms that will be set for that home mortgage loan.

These things can be made to help you or to hurt you, depending on your situation and what you will be using as terms for your loan. Your credit can help determine lower payments and better rates. Most home loans are given to people with a certain credit score and income that reflect that they can handle the loan they are applying for. Credit is the main factor used to determine the payments on your loan. You should know what your score is, so you can get the best rates and the best terms.

4. Commercial Mortgages

These mortgages are great for those that can afford them. One of the great advantages to a commercial flexible mortgage is that you can use this kind of mortgage to purchase a location for your business. If you are working out of your home and find that you need more room to grow, these can help you do that. You should, like with all other mortgage options, know what one you are looking for and what your terms should be. This will help you get the best rates possible and avoid any financial hardships down the road.

Commercial mortgages are not as easy to get as home mortgages because you are judged more harshly on your credit rating and what your business is worth. If your rating is low, then you will have a very hard time getting approved for this kind of loan. A good idea, if you think your credit is on the lower end, is to have a large down payment. Most business loan companies will require this down payment to show that you are serious about your business and willing to add your funds to help make it work. This can also make the mortgage company more apt to loan you the funds to purchase the property you are looking at.

5. Fixed Rate Mortgage

A fixed rate mortgage is the better of the two kinds to get. This can be a good type of mortgage for a person that is self employed if they are willing to look at a few things.

One of those things is not to have a stated income as part of your mortgage. This will sometimes knock you out of getting a fixed mortgage altogether. The stated income option is not something that can be taken lightly, as it is hard to use and will result in having the loan based on your credit score instead of your income. If you don't use the stated income option, you might be able to get a fixed mortgage, because you are not potentially taking on more loan then you can handle.
The other main reason that a self employed person may not get a fixed rate mortgage is that their credit is not as good as it could be. Your credit rating is the number one thing that mortgage companies will look at. You should be able to get a more flexible mortgage rate if your credit is good and clean of many late payments or other factors. You can work on this by keeping your credit in good working order and not overextending yourself when it comes to your credit and score. By having a credit card with a small balance that is paid every month, you will be working on repairing this and making it easier to get a fixed mortgage rate.

6. ARM Rates

ARM rates can be very tricky if you don't know how to use them correctly and know what they are.

An ARM or an adjustable rate mortgage is easier to get, but can be harder to maintain. They are the type of loans that most self employed people use for their mortgage needs. These are a good fit for someone that is using just their credit rating to get their loan. The difficult thing with these loans is that you have to plan for a refinance well before the fixed rate you start with expires and becomes the adjustable rate. This increase usually occurs when the loan is two years old. If you can't be sure that you are going to be able to refinance to a fixed rate, then you should not go for one of these loans.

Many home owners got bit by the harsh realities of the adjustable rate mortgage, but none as hard as the self employed. These people are the ones that got the most use out of these kinds of loans, but also got into trouble because of them.

7. Terms

There are many terms that you may have to think about when looking for your flexible mortgage. Some of these terms you will be able to control and some you may not.

Income is a major thing to think about when you are talking about your terms. Some mortgages will let self employed individuals use what is called a stated income. This is good for a small business that is newly formed and may not have the income to qualify for the type of loan you are interested in. These types of loans can have downsides, as well. You may have to deal with a larger percentage rate.

Another thing that you may encounter when trying to get a mortgage loan is your payment history and how you manage your money. If you are not as good with handling your money, then you may end up in trouble with your mortgage. You should always make a budget and stick to it. That way, you can plan where your money will go and get your bill, including your mortgage, paid on time.

One last term you may encounter is how you go about getting your mortgage. Companies are always in competition with each other, and a good way to get your best rate is to check more then one company's rates and what they can offer you for terms. That way, you will find the best rate and the best terms for your situation.

8. Credit Based Or Income Based

There are a couple of ways that you can go about getting a mortgage for your home or a commercial one for your business. Credit can be a make or break thing for your mortgage. If your credit is very good, then you can almost be certain that you will get the mortgage that you want at the price you want, but if it's not so good, you may have a harder time at it.

The other main source for your flexible mortgage loan is if you are going to prove your income or not. If you choose to go for your mortgage without proving your income, you will most likely have a higher rate than if you prove what you make. You can easily prove your income by using your tax return from the previous year, or by using your accounting statements from a few months back. You can also get a letter from your tax professional that states the amounts that you made in the previous year, as well as having your tax professional as a reference for your business. By proving what you earn, you will ensure that you are not getting into a mortgage that is too high for you.

9. Tax Benefits

There are many advantages to a flexible mortgage if you have your own business or are self employed. You just have to look for them.

One of the benefits is that you can deduct part of the cost of your mortgage if you are running your business out of your home. If you are using any of the space for business purposes, then you can claim that amount on your taxes. This will possibly help increase your refund for the year. You are not able to deduct your insurance cost because of the fact that you are working in your home, but you may be able to deduct the interest that has been paid on your loan. This can be extremely helpful to you if you are thinking of purchasing a home as a self employed individual.

If you run your business from a commercial location, then you are able to claim your entire mortgage payment for the year. These are probably the easier to claim because it will involve the whole mortgage, rather then having to take the time to figure out what portion of a home mortgage you are able to claim. You can also claim the interest that has built up on the mortgage with a commercial loan, as well as the insurance payments that you have made.

As you can see, there are many things that you should look for when choosing a flexible mortgage for the self employed. If you are self employed, it may seem hard to find a good mortgage with all that you need for yourself and your family, but with a little effort and some research, it can be done and you can get the best rates available.
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