Buying a house as a business owner or self-employed person: here’s what you need to know!
Even as a sole proprietor or entrepreneur, you obviously want the opportunity to buy a house! It doesn’t matter whether or not you have employees. You will go through roughly the same steps as someone who is employed, and you will need to provide almost the same documents. For a business owner with staff, the financial health of the business does come into play.
Getting a mortgage as an entrepreneur
If you are going to buy a house as an entrepreneur, it basically works the same as for someone in employment. You start by searching, attending various viewings, making an offer, and eventually securing a mortgage where your mortgage advisor can assist you in following the right steps and providing valuable guidance. Since you don’t have an employer’s statement as an entrepreneur, your net profit for the past three years is taken into account. An average of your net profit is then considered to calculate the maximum mortgage amount. Have you earned less in the last year than the average? Then the latter amount is taken as the test income for the maximum mortgage.
Difference between being an entrepreneur or being in employment
In the past, as an entrepreneur or self-employed person, you could sometimes get a lower maximum mortgage than someone in employment. By offering a lower mortgage, the lender reduces their risk in case you have lower or no income. But fortunately, that is no longer the case now. Even if you have your own business, you can borrow 100% of the property value. Of course, this varies by provider and depends on your personal situation, but your mortgage advisor can thoroughly research this for you. So as an entrepreneur today, you have virtually the same options as someone in employment.
What exactly do you need to provide?
To apply for a mortgage as an entrepreneur or self-employed person, you need to provide a fair amount of documents. These documents are necessary to create a clear picture of your financial situation so that the mortgage provider can calculate your maximum mortgage. They also serve as proof that you can afford the mortgage. Consider, for example:
- The income tax returns for the past three years;
- The annual financial statements for the past three years;
- Year-end statements and payslips, if you have been employed in the past three years;
- An overview of your assets (savings accounts, investments, and checking accounts);
- An overview of your monthly other personal income (such as allowances or benefits);
- een overzicht van je maandelijkse vaste lasten (zoals verzekeringen of je bedrijfsauto).
Getting a mortgage as a new entrepreneur or self-employed individual
Of course, you may not yet have annual figures for the past three years because your company has not yet been in existence for three years. Even then, you can usually apply for a mortgage. Of course, the possibilities can vary depending on the mortgage provider. Some lenders may not consider you, while others assess it on a case-by-case basis. Either way, you will need to provide additional information, such as an income statement or a forecast prepared by an accountant. And Nobel Mortgages will go out of its way to get it for you left or right!
Can I, as an entrepreneur, get a mortgage with the National Mortgage Guarantee (NHG)? (G)arantie afsluiten?
It may be interesting for you as an entrepreneur or self-employed person to take out a mortgage with National Mortgage Guarantee. This provides you with some security because NHG can take over any residual debt. In principle, you can already take out a mortgage with NHG if you have been active as an entrepreneur for at least one year. Of course, you must meet certain conditions. You must, in any case, provide an income statement that includes your income, and this document must be prepared by an independent party. If you have recently started working for yourself and previously worked in salaried employment, your key income is a combination of your salaried wages and your the income from your business.
Getting disability insurance?
Finally, with buying a home, you have a big responsibility: paying the mortgage. At its core, a mortgage is a loan with your house as collateral. If you can no longer afford the mortgage, the mortgage provider can sell your home through a forced auction. Of course, you wouldn’t want that, which is why it can be a good idea to take out disability insurance. Because if you become disabled, you can no longer work. And as an entrepreneur, that means no income. It is not cheap insurance, but it ensures that you still have an income if you are unexpectedly unable to work.
Nobel Mortgages
We at Nobel Mortgages are happy to help you by providing high-quality financial advice and think with you on all fronts. We always go the extra mile for our (potential) clients, truly analyze all possibilities and, when necessary, always think outside the box. In this way, we ensure that we can achieve what others cannot. In other words, we are fully dedicated to helping you obtain the best mortgage or loan that suits you perfectly and, of course, aligns completely with your situation and preferences. Do you also want an advisor who looks outside the box and really analyzes all the possibilities for you? Then contact our experienced and enthusiastic team soon. We are available to you 24 hours a day with the utmost commitment and sincere attention. An e-mail is a snap to info@nobelhypotheken.nl or call or app to 06-54770122.