When you talk about buying a home as a freelancer, you are talking about a difficult situation. However, complicated does not mean impossible. There are few but visible possibilities of taking home with ‘freelancer’ as your employment tag.
Gather money – Journey starts from here only
Arrangement of funds is the prime concern of a buyer in this situation. The final destination can be a mortgage, but due to sundry issues, one needs to gather money as much as possible. It is the only best way to lessen the struggle on the eligibility criteria to qualify for the loan. Here are the several ways that may help you do the due –
Embrace a minimalistic lifestyle and save a lot of money
You may not believe it, but it is true. The whole world has reasons to understand now the importance of a lifestyle of minimalism. The weekend parties that you do to celebrate the freedom of a freelancer is great. But you do not realize that how hefty it makes the expense bucket of your monthly budget.
Your logic is that you order just a cold drink or beer and cook at home only for friends or may buy some snacks. Whatever you do, if that included the unnecessary consumption of money and material, it sucks financial capacity. Stop doing online shopping now and then. Everything that takes your money without any reasonable cause is not good.
Sell old assets
Unwanted can be transformed into wanted by taking it to a place where it is necessary. The many useless assets like a table, old car/bike, double bed, almirah, chair etc. etc. etc. in your underground room are worthy.
Take the stuff out, clean them, check if they are working, and sell them in a yard sale. Sometimes we do not even realize that the things which we carry in our house can earn a massive sum of money. De-clutter your clutter by selling it at a reasonable price. The arrangement of funds becomes easy when you try easy, simple, yet effective methods.
Take bigger projects
Focus on big clients and projects that can offer you better financial satisfaction. This may need you to work extra hours, but that has worth as you need to buy your first-ever home. The stronger is the monthly income, the smoother is the property loan approval. After all, the lenders also consider the prime income source as the most strong point while processing your application. If they see that despite being a freelancer, you are earning well, they get calm and realize that you can make the timely repayments.
Block the financial drain of bad debt
A smart of accumulating funds is about stopping the useless flow of money. The high-interest debts like medical debt, credit cards, payday loans etc. absorb a significant part of your income. Pay them off and get rid of a considerable burden. You will see a drastic and positive change and such debts also adversely affect the credit rating.
Now the suggestions to calm the struggle on the part of the mortgage
Once you gather a decent amount of money, it is time to apply for a mortgage. For that, you need to follow some dos and don’ts.
Learn how to describe your work type and income source
The prime issues in the case of freelancer and self-employed happen because the lenders fail to understand their kind of business. Also, as the income of a freelancer does not fall in the category of standard salary. This factor makes it difficult for mortgage companies to assess earning. Keep the invoices ready to show when the time comes. The work you do should have a legal presence.
Keep the tax return of the last two years ready
Tax return details are as vital to come in the process as the oxygen to breathe. You need to arrange that on time. It is better if you send the request to the Government office at the right time as it takes at least 15 days.
Know about the average amount of income necessary to qualify for funds
The lenders take a minimum average income requirement against a specific loan amount. If you know that in advance, it can easy to stay prepared. However, it is not possible to go to every lender and ask the same question. Also, multiple applications can degrade your credit rating. The better thing is to take out a mortgage from a mortgage broker in the UK. Through a broking company, it is better to know which lender takes what average income limit. Once it is done, apply through a broker as you have better chances of approval.
The above information can help you create a strong base and buy your home despite the tag of a freelancer.