How to Get a Mortgage if you're Self-EmployedWritten by David Miles
A self-employed person is someone who runs their own business and works for themselves without an employer. Directors of small limited companies, although technically employed on a PAYE basis, will generally be classed as self employed when it comes to applying for a mortgage or remortgage. If you are self-employed, work on a contract basis, or have an income that is irregular or comes from multiple sources, it will generally be harder for you to get a mortgage than it is for someone who is an employee and can easily prove their income. With over three million self-employed individuals in UK, attitude of many mortgage lenders towards self-employed population is a problem that can affect a large number of people, even though many self-employed people often earn more than a lot of salaried workers. The problem stems from fact that majority of mainstream mortgage lenders require proof of income when assessing a mortgage or remortgage application. Employed people can use their payslips and P60 as proof of salary, but there is no such straightforward equivalent if you are self-employed. In place of payslips, self-employed workers may be asked to provide audited accounts that show their income over last three years. However, in many cases, these accounts will not give an accurate reflection of how much money a self-employed person is making. This is because if accountant who prepared accounts is doing his job properly, he will have offset as many allowable expenses as possible against tax. This has effect of reducing self-employed person's net profit, upon which lender will base size of mortgage or remortgage they are prepared to offer.
| | How Will Check 21 Affect You?Written by Shannon Jarvies
You may already be familiar with Check 21, a federal law that goes into effect on October 28, 2004. If you're like me, this may be something you hadn't heard about until just yesterday. The Check Clearing for 21st Century Act, otherwise known as Check 21, is process of turning checks your write into images and transmitting them by computer.What does this mean to you? Expect time your check clears to decrease drastically. If you live paycheck to paycheck and often count on a one or two day "grace period" to get funds into your account after paying bills, you'll need to re-organize your budgeting process. Checks will clear in a matter of hours now, not days. You will no longer be getting your cancelled checks back with your bank statement. If you get anything at all, it will be a "substitute check" which is a certain kind of copy of your original check. You may be charged extra fees. It's possible that by using this method, your check will be paid twice: once with original and once with scanned image. Or there may be an error made in amount a check was written for in process of turning an paper check into an electronic check.
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