Choosing to walk the home refinance path can be quite beneficial to the ordinary homeowner. It will offer them flexibility in terms of loan repayment and possibly lower mortgage rates after refinancing.
However, lenders tend to view the self-employed loan applicants as risky investments since their income typically fluctuates from time to time.
This does not necessarily mean that you are not eligible for low mortgage rates if you are a self-employed homeowner, though. With these three tips from wasatchpeaks.com, you can convince lenders to trust you enough to offer you low loan rates.
1. Maintain a high credit score
Lenders will typically offer low home refinancing rates in Ogden to people with a credit score between 740 and 750. This range demonstrates the responsibility of the applicant to handle credit.
Before proceeding to apply for the home refinancing option, take a look at your credit score to determine whether you need to take steps to improve it. One step that will help to raise your score is to ensure that you pay off most of your credit card balances and retain old credit card accounts.
2. Present lenders with a profit and loss statement
Other than requiring seeing your tax returns, most lenders will request to see the profit and loss statement of your business.
If you have been running your business for a while, you can use your business’ financial statements to showcase its income trajectory. Not only will this make your business look viable, but it will also present you as a less risky borrower.
3. Have a well-maintained savings account
Self-employed business owners will tend to have large savings accounts for situations where their income fluctuates. This enables them to keep the business afloat in case the fluctuation is a negative one.
On the other hand, such large savings accounts will give the lenders the mindset that you will easily achieve the monthly loan installments in such scenarios when there is a negative income fluctuation from your business.
Since lenders will have different policies, it is always wise to research widely when seeking mortgage refinancing. By shopping around, you could land some of the best rates. Use the tips above and have a smooth time looking for an amazing home refinancing solution.