How to Untangle the Mystery Behind Securing Financing When You Are a Business Owner
If you are a business owner and in the market for a mortgage, you may have found that navigating the world of financing can be challenging. It might seem like traditional lenders focus solely on your net income on tax returns while ignoring any business expenses or recent growth. This approach can make it difficult for business owners to qualify for a mortgage, leaving many feeling frustrated and hopeless. However, this doesn't have to be the case. In this blog post, we will discuss some tips and tricks on how to secure financing when you are a business owner.
The first and most crucial step in securing financing as a business owner is finding a mortgage specialist who understands your unique financial situation. They can provide you with a list of documents needed to determine your eligibility for a mortgage. Be prepared to provide tax returns, both personal and business (if incorporated), and recent business bank statements. It's essential to organize and package your information to meet the lender's criteria, as not all lenders are alike.
Traditional lenders, such as big banks, can sometimes be inflexible when it comes to self-employed business owners. They might even consider business expenses as a reason not to end. Therefore, consider working with non-traditional lenders such as credit unions, mono-line banks, and “B” lenders that might be more inclined to look at your financials holistically. These lenders can offer more flexibility in terms of income requirements and have different underwriting guidelines, which can lead to easier financing for business owners.
Another essential factor to consider when looking for financing as a business owner is the health and recent growth of your business. Lenders might want to know how long your business has been around, its financial stability, and how it has grown over time. With accurate and up-to-date financial information, you can showcase your business's growth and how it affects your ability to repay the mortgage. This might be one of the deciding factors for a lender when considering whether or not to lend to you.
Since every lender is different, it's crucial to research and compare your options before settling on one. Some lenders might even specialize in specific industries or cater to homebuyers with unique financial circumstances. Do your homework, ask questions, and remember that you can negotiate the terms of any mortgage, including interest rates and fees. Being prepared will put you in a better position to find the best lender for your needs.
Getting a mortgage as a business owner doesn't have to be a daunting task. With the right specialist, accurate financial records, diligent evaluation, comparison shopping, and a good relationship with the lender, it can be a manageable one. Take the time to understand your options, invest in your business, and be patient. Securing financing as a business owner is possible and can unlock the dream of homeownership. By following our tips and tricks, you can untangle the mystery behind securing financing and set yourself on the path to successful homeownership. Contact karen.canning@mortgagegoup.com or 604-710-8934 to review your options.