Guest article provided on 01/31/2022 by : Tina Martin
Whether you’re a food or DIY blogger or simply have an ecommerce business, once your home business starts to grow, you may realize you require additional space to suit the needs of a larger business. On one hand, this is a great problem to have. However, on the other hand, getting a loan to purchase a house that will also be your business can be difficult. If you are a home business owner hoping to upsize, here are a few things you need to know about getting a loan to purchase a house that will be perfect for you and your growing business, brought to you courtesy of Empire Digital Agency.Home
Home-based businesses tend to have fewer financing options.
The difficulty in acquiring a loan for your home-based business is often due simply to the fact that it’s harder to get financing when you’re self-employed. If you don’t have a proven record of financial success, it can be harder to demonstrate your ability to pay off a loan. Additionally, newer businesses may have less capital to work with for making down payments. This shouldn’t
dissuade you from your plan to secure a home loan and upsize your residence. It does mean you may have to get creative, however.
Some resources for home business owners seeking financing.
First, figure out how much you will get from the sale of your existing home and what you will still need in terms of financing. Home equity loans and invoice financing may be options. It helps if you’ve been in business longer and have more financial records, so if you are able to wait for a little while and keep your business functioning in your present residence, that might make it easier to get a good mortgage.
Seek assistance from professionals.
You should talk to your banker and any other financial advisors about what options are available to you. Additionally, work with your accountant to make sure you have accurately reported all your business income. Your accountant can also help you create a budget that will guide you in knowing your purchasing power and what you have to do to increase it. Finally, talk to a realtor about what you are looking for, ask them about comparable home prices in your target area, and let them help you with the work of house-hunting.
Do what you can to increase your buying power.
One way you can increase your chance at a good loan is to eliminate debt. This will leave you with more income for a down payment as well as for future monthly payments. If you have older debts that can be paid off now without making a dent in your funds, try to do so. Another debt reduction solution is to get a debt consolidation loan, which will bundle your existing debts into a single low-interest payment.
Consolidating debt may make your credit score dip briefly, but over time will likely improve it. And you do want a good credit score, before applying for a mortgage, so check your credit and make sure you have no outstanding debts that need to be paid up. Do be wary, however, of offers of debt management that are essentially scams.
Shop for a good deal.
It may seem like a no-brainer that you want to get the best possible property for the price you can pay. But how to do this? First, be clear on the specifications for your new home, keeping in mind both family and business needs. Research area real estate and see which neighborhoods don’t sacrifice quality for affordability. If you decide to purchase a home “as-is,” make sure to hire a home inspector to know precisely what you’re buying so nothing catches you by surprise. Ask a realtor for help in locating anyone who is interested in making a quick sale, since they may be open to selling at a lower price.
Applying for a home loan is rarely a fun experience, and can be a downright headache, but if you plan well and strategize carefully, it could open the door for you to enter an exciting new stage of your home business journey.
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