Mortgages for the Self-Employed

More and more self employed people are using mortgage options. There has been a gradual and steady increase in this statistics. The more interesting part of this is that a lot of lenders are showing an increasing interest in lending money to the self-employed against the security of their business.

The collateral of an established or upcoming business is grabbing the eyeballs of many a lender. A lot has been published contrary to this trend, especially on the internet. Those who are contradicting are of the view that lenders are not taking chances on betting their finances on freelancers or self employed people. On the contrary, lenders have shown genuine and increasing interest towards these self employed individuals in providing real estate mortgages, provided the applicants are well prepared and responsible. Lenders have gone as far as providing the same interest rates to self-employed borrowers which they usually reserve for their corporate serving clients.

This graph has shown such a rise because there has been an enormous rise in the count of people who are turning towards self employment. The workplace composition has changed significantly. So much so that a previous generation will not be able to recognize a workplace properly. The era of manufacturing is slowly but surely giving way to the era of service. The basis of economy has evolved. This culture has led to a steady increase in the number of part time jobs in the market. A natural consequence of this is a steady decline in the number of full time jobs and full time workers.


With the scenario being the way it is, there are a lot of self employed people and their numbers are swelling by the day. Lenders have to change their policies according to this trend. Mainly because they are fast forming a big chunk of the market. Lenders have adjusted their terms, conditions, and policies to suit the needs of this majority. A lender who has refused to bring in this change has automatically defaulted himself from the race in this particular segment of the market. Competition in the financial market being stiff as it is, no lender can actually afford to let go of a customer base this large. The only and sensible alternative, therefore, is to offer deals which attract the self employed.

This change has given freelancers and others similar to them a warm reception in the market. Actually, a lot has not changed. The new set of rules are a simple rehash of the previous set of rules. This type of lending is just as traditional so self employed borrowers need not be scared of getting into complex contracts which they only half understand.

The rules are just as simple. A borrower has to provide assurance to the lender of the ability to repay the amount he intends to borrow. Lenders look at the borrowers bank statements, tax returns, credit score, and track record for this assurance. That is all the assurity a borrower has to show.

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