Thursday, November 26, 2009

Home Mortgages That Small Business Owners May Qualify For

By Chris Channing

There are many flavors of mortgage loans to choose from. Among them, the self certification loan. This loan is ideal for the self employed, but if you have the opportunity, you should investigate other types of mortgages that would work better in comparison.

The 100% mortgage is a type of mortgage that only select individuals qualify for. This type of mortgage doesn't require that the home owner put any money down- the entire cost of the home will be covered by the mortgage. Being qualified is tough, since usually lenders require as much as 10% or more to secure the loan. Excellent credit and a good guarantor are key in qualifying.

Buy to let mortgages are another alternative that lenders do typically give to the self employed. Buy to let mortgages operate based on the assumption that as soon as a property is obtained, the borrower is going to make necessary arrangements to have the property let out to tenants. This form of mortgage is easier to obtain, since income from the property can easily be used to pay installments each month.

In theory, any small business owner can run out of business and lose the ability to pay a home mortgage loan. Lenders at some institutions have realized this, and created the flexible mortgage. These mortgage types allow borrowers to take short vacations in paying on the mortgage, but also allows for overpayment for seasons in which your self employed work is doing above average.

Some mortgages can work in favor of business owners by saving money through means of investment. A foreign currency mortgage does just that; allowing borrowers to shift the value of the mortgage through one currency to the next, much like a foreign exchange trader would do so with an investment. Over the course of the loan, it can dramatically save on the total amount owed. It can be a gamble, since a fluctuation may not work in the favor of the borrower.

Living in the United Kingdom has many advantages, especially for first-time home buyers. Buying a home for the first time, either by yourself or with a loved one, could possibly subject you to grant money. Accountants and loan officers will be able to tell you more on how to qualify, or if you can apply, based on your current financial standing. The extra help allows you to save money or even use it to get a more expensive home.

Final Thoughts

Self certification loans have their place in society, but are sometimes seen as less desirable because of the interest rates that accompany them. Look at other forms of mortgage loans and see what you can qualify for before deciding to stick with a self certification mortgage loan. - 29904

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