It is believed that self-employed people don’t get their mortgage applications approved in Phoenix that easily compared to employed and salaried individuals. This actually makes quite a lot of sense, as there is nothing like job security for self-employed individuals. Also there is no stable income for self-employed hence Mortgage lenders in Phoenix tend to take more time in deciding whether they should lend the mortgage to a particular self-employed person or not.
This should be kept in mind that though there are less chances of getting an application approved for mortgage for self-employed people in Phoenix, there are various options and categories in which they can apply for a mortgage, which allows them to have more chance of getting approval on mortgage.
Normally, lenders check the salary slips and income statements of a person to decide whether or not to approve a particular Mortgage application, but self-employed people cannot produce any of these documents with proper evidence, everybody knows that in these tough global economic situation, businesses fail very often.
Here are few steps that will increase the chances of a self-employed person to get approval on mortgage application:
Identify why your application might get rejected?
The first thing to do should be to find out why most of the self-employed mortgage applications get rejected in the first place and what you can do to avoid the reasons. The most crucial thing to do is to convince your lender that your current income level will be maintained at the least for the whole period of mortgage. And you should be prepared for that, both mentally and with the help of documents as well.
In applications of self-employed persons, lenders are more concerned with how you manage your finances, rather than how consistent your income is. They are aware that the income of a self-employed person can fluctuate drastically; hence they don’t consider it in the decision process. Lenders feel more comfortable when lending the mortgage to someone who has his house in order.
Documentation Requirements
There are some documents required along with self-employed applications that are not required for normal mortgages. These documents are related to the person’s business e.g. trade license and other business certificates, they will also have to prove that there stated income numbers are accurate and up-to-date. Fake or inaccurate information will only get your application to be rejected.
Also tax return statements will be required to prove that the company is not behind on its taxes, if your business is behind on it due taxes you might end up paying a lot more interest rate than in normal scenario.
Final words
Before applying for any mortgage in Phoenix, make sure all your other finances are in order and all your previous debts are clear. If you already have some debt to re-pay the lender will not be able to trust your situation anyways. Keep in mind, it is not impossible to get a mortgage approval for a self-employed person, it just takes more work and planning.
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