Self employed loans by monakotb

VIEWS: 36 PAGES: 2

More Info
									Self employed loans


Being self employed has always been associated with challenges. Is
finding a loan for self employed one of them? Is it? Well with loans for
self employed suffer more from lack of information rather than lack of
choices. Self employed people often complain of lack of information
available when it comes to loans for self employed. Lenders will always
offer you choices - it is their business. The fundamental issue remains
making the right choice.

If you as an individual operate a business or profession as an owner or
partner, is an independent contractor, independent consultant or someone
in changeable employment, then you are considered self employed.
Traditionally self employed loans have been associated with difficulty
and high interest rates. However, with more and more people preferring
work for themselves, self employed loans have become more flexible.

If you are a self employed with accounts worth three or more years and a
good credit record, your loan application will be processed smoothly. You
will stand on the same platform with any regular salary worker. Well if
you do not conform to any of the above standard, expect that you are self
employed; you can still find loans.

One thing that almost always goes against the self employed is that they
are always negligent in filing their returns. The accounts understate the
earnings of self employed. This is usually not very encouraging aspect
especially while looking for loans for it cuts down the amount you can
borrow as self employed loans.

Self certification mortgages are a way to secure mortgage loan for those
who do not have required documents. The self employed certify for
themselves without any recognized proof. Terms with these self employed
loans are at times strict and interest rates high. Look for interest
rates that suit your budget because they are possible.

Self employed loans will have down payment ranging from 20%-40%. Down
payment serves to negate the risk for the lender while dealing with loans
for self employed. Usually self employed people do not have a fixed
income and also statistics fail to show a very promising figure about
success of businesses. One out of five people shifting from employed to
self employed fail. This puts self employed loans into the risk area. If
a self employed is able to make substantial down payment, the loan lender
will neglect any other negative aspect in the loan application.

Self-employed people are typically asked for two to three years of
personal and business tax statements, depending on whether the individual
is a partner or a proprietor. If you are a partner then the tax
statements of the company, three years of general T1 tax returns and
three years of personal notices of assessments. Some lenders will approve
loans by a simple letter from your accountant.
Self employed borrowers often end up taking “low doc” or “no doc” loans.
“Low doc” self employed loans will require very little documents for
verification. While “no doc” loans, a self employed would necessitate no
authentication of assets or documents. The cost for such loans for a self
employed is interest rates. A home equity line of credit or HELOC is
also possible for self employed. HELOC is priced at a spread to base
interest rate.

Credit history is generally the yardstick to what flexibility a self
employed is offered with loans. This will also has an influence on loan
to value ratio which is 70%-90% for self employed loans. However, those
self employed who have bad credit ratings also have an option. There are
lenders who will give self employed loan with poor credit. Watch out for
interest rates.

As you can see the choices are many for a self employed looking for
loans. Because there are so many variations within self employed loans,
it is advisable to search for considerable options while applying for
self employed loans. Some prefer brokers to lenders to find self employed
loans. However, lenders can search for online options to find the best
deal. With self employed loans you won’t be penalized because you have
chosen to have a certain kind of freedom – the freedom to work on your
own terms.

								
To top