The percentage of self-employed people is growing in Singapore every year. In spite of the fact that being self-employed isn’t easy, more and more youths are hopping onto this bandwagon. Just because you’re a self-employed Singaporean doesn’t make you ineligible for a housing loan. There are schemes designed to cater to the home loan needs of self-employed individuals. Here’s how a self-employed person can get a housing loan without much too much hassle.
Get your paperwork ready:
The lender will go through the details of your income and savings before deciding if you can get the housing loan. Therefore, it’s necessary for you to complete the paperwork beforehand. Generally, the lender considers the income and saving details of the past year when approving a home loan. However, if you’re self-employed, you’ll need to gather and provide details for at least two years of your financial history. If you’re planning to avail a Singapore housing loan refinance scheme, make sure to go through the finer details of the offer provided by the refinancing bank. Calculate the interest you’re paying and the rate you’ll have to pay before making your choice.
Fixed rate interest:
As you’re not employed by any organization or business, there’s no particular set income you can rely on. Startups go through ups and downs, which sometimes may not earn as much profit as you hope. Therefore, your safe bet is to go for fixed interest rates rather than floating interest rates. You’ll have a clear idea about how much to pay each month, independent from the current market rate.
Meet the banker or lender:
When making vital business decisions, don’t you organise a meeting with other associates? It’s similar idea for home loan as well. The structures of home loans are complex and you must meet the banker or the lender in person to understand each minute detail. Make sure to ask the banker or lender many questions pertaining to your requirements.
Separate business and personal expenses:
It’s true that managing your expenses when you’re planning to buy a home is tiresome work. However, if you’ve applied for the home loan on the basis of your business profits, you mustn’t use your business accounts to repay the loan. Ensure that the loan is paid from your savings account and also avoid spending your personal income on your business. Besides, if you start earning more in future, you can consider refinancing your home loan with schemes you encounter in the future.
It may seem intimidating to handle both your startup as well as your home loan, but the process won’t be that challenging if you follow the basic points mentioned above. If you’ve already purchased a home, you can still enjoy the benefits by opting to refinance your home loan in Singapore.