It’s difficult to find the self-employment facts when so many myths, scams and complete cons get in the way of honest workers. There’s a lot of incorrect information out there, and it’s very easy for even extremely intelligent, hard-working professionals to fall prey to the false data. Find out what it means to work alone, and learn the truth about being self employed.
Self-Employment: The Facts
Knowing certain facts about self-employment makes it easier to avoid all those scams, helping professionals learn how to identify myths rather than fall prey to them. Everyone should know a few things about self-employment before pursing this career path.
Independent contractors must cover their own health care. This is a fact that every self employed professional must face. Individual policies don’t often provide the best coverage at the most affordable rate, so it’s extremely important to shop around to find the best policy.
Homeowners insurance may not cover everything. Self employed professionals who enjoy their own home office space may find that their equipment and other items are covered by homeowners insurance in the case of accidents and catastrophes. Then again, they may not. It’s important to carefully check such policies to find out what’s covered and what isn’t, in case additional insurance is needed.
Not all employers are legitimate and honest. Sometimes, people lie or fail to follow through. Even when a sought-after work at home job is obtained and good work is completed, not all employers and clients will follow through with promised payments (yes, even when there are contracts involved). The best way to deal with this is to maintain records, get payment agreements in writing, and keep persevering. If necessary, begin writing letters every week when delinquent payments continue to be delayed.
There’s a lot of competition in self-employment. For every work at home job that seems promising, there are at least a dozen other applicants vying for the same position. It’s important to build a professional resume, write a great cover letter and always provide the highest-quality work. Remember that hard work always speaks for itself.
Being Self Employed
The truth is, being self employed isn’t easy, but knowing the facts does help. Learning how to sort out the self-employment facts from the fiction is an ongoing process. There are a lot of scams, myths and false pieces of information out there, data which can fool even the most cunning of workers.To find the truth, search for forums and discussion groups where self employed professionals exchange information and answer questions. A little bit of research can really help when it comes to working alone.
How to Get a Self Employed Mortgage
A self-employed mortgage is normally possible provided that a borrower has a 20% deposit. However, it will be more difficult to attain than for a salaried employee. The reason for this is the higher risk the freelancer poses to the lender in terms of defaulting on the agreement.
The Self-Employed Mortgage and the Importance of 3 Years of Accounts
The longer the history of being self-employed, the better the chance of a self-employed mortgage being approved. Lenders will analyse the accounts of a freelancer to check revenue consistency and the overall viability of the business.
A self-employed mortgage is possible if 3 years of accounts can be demonstrated. The problem is that many accountants legally under-state earnings to reduce the tax liabilities of the freelancer. This creates the illusion of lower earnings.
However, it may be possible to get a self-certified mortgage if earnings have been under-stated or 3 years accounts aren’t available. This allows a borrower to certify that they earn a specific amount, but there is no onus on the borrower to prove it.
The LTV maximum for self-certified mortgages will normally be about 80%. To account for the higher risk, most lenders charge a higher rate of APR. Should bad credit also be an issue it is advisable to seek the services of a mortgage broker.
Mortgage Brokers and the Self-Employed Mortgage
Using mortgage brokers will add about 1% to the amount borrowed, but it could be the difference between approval and rejection. Brokers regularly have useful financial connections and also know who is more likely to approve a self-employed mortgage which minimises credit searches.
Self-Employment and Bad Credit
Bad credit is an obstacle to getting a self-employed mortgage, but it is still achievable. A freelancer with bad credit is more likely to be approved if the self-employed accounts history shows income consistency. A higher rate of APR will be charged to borrowers with bad credit.
Working as a freelancer isn’t a bar to getting a self-employed mortgage. The process is generally more complicated so securing the services of a mortgage broker is usually a good idea. Even if 3 years of self-employed accounts can’t be provided, it should still be possible to get a self-certified mortgage.