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Of course, as a self-employed person, you also want the opportunity to buy your own dream home!
You go through the same steps as someone who is employed. But you will need to provide many more documents to substantiate your financial situation. For someone who is salaried, a pay stub is largely sufficient.
Below is an overview of the options, rules and conditions that apply to you as a Independent contractor.
Is there a difference between being a self-employed person or someone employed?
In the past, as a self-employed person, you could sometimes get a lower maximum mortgage than someone in employment.
This is because by giving you a lower mortgage, the lender is less at risk when you have less or no income. But fortunately, that is no longer the case.
You can also borrow 100% of the home value as an independent contractor.
Of course, this varies from provider to provider and also depends on your personal situation, but your mortgage advisor can figure this out completely for you.
So as a independent contractor today, you have virtually the same opportunities as someone employed.
As a business owner, what do you need to provide?
To apply for a mortgage as a self-employed person, you need to provide a fair amount of documents.
These documents are needed to paint a clear picture of your financial situation so that the mortgage provider can calculate your maximum mortgage. They also allow you to demonstrate your ability to pay the mortgage.
Consider, among others:
- Income tax returns for the past three years;
- Financial statements for the past three years;
- Annual statements and pay stubs, if you have been employed within the past three years;
- A forecast of your current annual income prepared by an accountant or bookkeeper;
- Extract from the Chamber of Commerce as proof that your company is officially registered;
- A valid passport or identity card;
- A statement of your assets (savings accounts, investments and checking accounts);
- A statement of your monthly other private income (such as allowances or benefits);
- An overview of your monthly fixed expenses (such as insurance or your company car).
Since you don’t have an employer’s statement, your net income for the past three years will be looked at. This will then look at the average to calculate the maximum mortgage.
Did you earn less than the average in the last year? Then the latter amount is taken as the test income for the maximum mortgage.
Getting a mortgage as a first-time self-employed person
Of course, you may not yet have annual figures for the past three years because your business has not yet been in existence for three years. Even then you can (usually) apply for and get a mortgage.
Of course, options vary by mortgage provider. With some you don’t qualify, others again look at it per personal situation.
Either way you need a good mortgage broker who will go out of his way to get it for you left or right!
Can I get a mortgage with NHG as a independent contractor?
It may be interesting for you as a independent contractor to take out a mortgage with National Mortgage Guarantee .
After all, it gives you some security because the NHG can take over any residual debt.
In principle, you can already take out a mortgage with NHG if you have been active as an entrepreneur for at least one year. Of course, you must meet certain conditions.
In any case, you must provide an income statement showing your test income, and this document must be prepared by an independent party.
If you have recently started working for yourself and previously worked in salaried employment, your key income is a combination of your salaried income and the income from your business.
Should I purchase disability insurance?
Finally, with buying a house, you have a big responsibility: paying the mortgage.
The mortgage is basically a loan with your home as collateral. When you can no longer pay the mortgage, the mortgage provider can forcefully sell your home through an auction.
Of course you don’t want that, which is why it may be a good idea to get disability insurance. After all, if you become disabled, you won’t be able to work anymore.
Being self-employed means no more income. It is not cheap insurance, but it ensures that you still have an income if you are unexpectedly unable to work.
Mortgage2Go
Do you have certainty about what you as a self-employed person can borrow maximum for a mortgage and want to get the financing just about right before you start house hunting?
Then Mortgage2Go offers the solution. With a pre-checked mortgage, your financing is already pretty much in place and you can be sure you can afford your dream home.
Within two business days of your accepted offer, your financing is then complete and finally approved!
Want to know if you qualify? Then apply for a pre-checked mortgage!
