Home Loans and Being Self-Employed

As a self-employed person, whether you own your own business, free-lance or consult, buying a home and applying for a home loan will most likely require more time, effort and paperwork than someone who is employed and earns a stable salary.

The reason for this is simply that there is an increasing trend in South Africa for people to put in offers to purchase that are subject to the sale of a property and, most often, the approval of a home loan.

As such, as a self-employed person, it is probably a good idea to 'get all of your ducks in a row' and save yourself unnecessary stress and bother by aiming to get your home loan pre-approved.

South African banks and financial institutions are always willing to provide home loans to self-employed people, as long as you can provide them with proof that your business is sustainable and you have sufficient capital.

The following are the minimum requirements that you need to meet as a self-employed person applying for a home loan:

A copy of your Identity Document

Recent utilities bills from the past 3 or 4 months

Personal and business bank statements for the last 3 months

Your most recent IT 34 from SARS

An accountant's letter listing your total earnings and gross profit from the previous 12 months

A record (audited) of your financial spreadsheets listing your monthly income and expenditure from the previous 12 months

Bear in mind that if you want to purchase a home in partnership, your partner - assuming he or she is also self-employed - needs to submit the above information too.

However, if your partner is employed by a company, all they have to provide is their most recent payslip, a copy of their ID, their tax number, a recent utilities bill and the previous 3 months of bank statements.

Always remember to look around for the best home loan deal to suit your needs and wants. You'll never regret it in the long-run.

Related Insurance Articles:
* 10 Home Selling Flaws to Avoid
* Defining a Mortgage Bond
* The Insurance Repercussions of Drinking and Driving
* Why Home Loans Are a Good Debt
* Do Your Homework Before Buying a Home
* Using a Home Loan Originator
* Home Loans Basics

3/7/2008 4:04:52 PM