Jefanie Genilla
Gone are the days when you can just present your payslip and employment contract to get a loan. As a self-employed individual, you’re now subject to a different set of rules when it comes to loan applications. To begin with, your main income stream, which is your business, might show seasonal fluctuations because it depends on the purchasing power of your clients. Because of this, financing providers may also need more assurance and proofs that you can repay the loan, despite your fluctuating revenue. Usually, they’ll give you a long list of requirements that includes your cash flow statement, client list and business permit.
The process just got more complex. That’s it. So what should you do to get that home you’ve been dreaming for many years now? To get started, take time to get all these five factors in order:
- Your books – Partner with an accountant to help you organize your accounts, especially in reconciling your invoices. He or she can also balance your expenses and income statement, which is a necessary loan application document.
- Your preferred loan type – Know exactly what type of home loan to apply for, one that’s suited to your lifestyle and budget. Are you planning to purchase a duplex or a row house? Bear in mind that as home value differs so does your loanable amount and interest rate.
- Your credit history – Gather up documents showing all your previous transactions with financing providers, if you have any. Prioritize those you’ve settled on time and without discrepancies as this will give your prospect provider an impression that you’re a responsible borrower.
- Your income statement – Prepare your business’s cash flow statement. For faster approval, make sure that your balance sheet shows a growth in revenue and clients. Aside from this, it also helps to submit information about your other sources of income, if you have any. This will give lenders an assurance that you’re highly capable of paying off the loan.
- Researched info about your possible options – Be informed. Browse Loansolutions.ph website to know the options you have when it comes to loan solutions. Our site also has comparison tools and provider reviews to keep you guided on what’s new in the financing industry. You should do your own research to avoid getting tricked by predatory lenders, who’ll take advantage of your naiveté about financing.
Yes, it might be more challenging for you to get a home loan if you’re a self-employed individual. And that’s because of the dynamic nature of your business and source of income. However, if you take a closer look at the points mentioned above, you’ll be able to stay on the right track. Our loan consultants here at Loansolutions PH can also help you choose the right lending partner. Plus, we have a 3-Step Online Application Process you can follow as soon as you can to get started with your application immediately.
