You can save costs and manage your repayments more effectively by refinancing your mortgage or changing to a different type of loan. However, understanding the procedure for modifying your home loan can take some time for small company owners.
Make sure you have a solid credit score if you're self-employed and considering refinancing your mortgage to be eligible for the lowest interest rate. You might need to put down a bigger deposit than someone with regular employment because you're self-employed.
But don't let these things discourage you. If you're self-employed and looking to refinance your mortgage, it is possible to get approved. Just make sure you're prepared with the necessary documentation and have a solid financial foundation.
Here are some time-saving tips to help you effectively refinance your house loan if you run a small business or are self-employed.
Recognise the Purpose of Your Refinancing
Be specific about why you wish to change. This will enable you to assess whether a new mortgage's advantages outweigh your existing one's costs.
A lower interest rate, combining company and personal banking with one financial institution, and a different home loan type are a few popular reasons for a small business owner or self-employed person to transfer.
It's crucial to consider factors other than interest rates when evaluating new mortgages. Additionally, you should contrast all the pertinent terms, costs, and fees of the current loan with the potential replacement loan.
Determine the Costs and Your Financial Capacity
Check what you can afford because your business's expenses and income may have changed since you last applied for your current house loan. You should also consider any ongoing expenses and any fees you might incur, such as exit, break, settlement, and new loan establishment fees.
Make an appointment to speak with a lending professional to discuss costs and borrowing power in person, at your place of employment, or over the phone.
Arrange Your Documents
To help you receive a decision more quickly, have your documentation prepared for your lender visit. To complete your application, you'll normally need the most recent copy of the following records:
- Financial accounts for businesses
- Tax returns
- Notices of assessment
- Statements for the mortgage you intend to refinance
- Statements from your credit cards, savings accounts, and other loans from other financial organisations
Following the preparation of your paperwork, the lender will apply to evaluate your income in relation to your debt obligations, expenses, and credit history. You will get a letter of approval and a contract for your new mortgage if your application is approved.
Your current home loan will be repaid, and a new one will be established after the lender has received all the signed loan documentation. The timelines and procedures will vary slightly depending on the refinance option you select.
Conclusion
One of the primary motives for refinancing is typically to get a better interest rate, but you should consider the interest rate when considering new home loan possibilities. When you refinance, you can optimise your current loan and make your mortgage work harder by selecting features that suit your needs.
Remember, self-employed borrowers are often eligible to apply for the same home loans, offers, and rates as wage employees.
Wealthy You is a reliable mortgage broker in Sydney that can assist you if you want to refinance. We provide a range of mortgage solutions to satisfy your unique financial requirements. Call us today to discuss your financing needs!
