7 tips for digital nomads: how to step on the property ladder faster

Property specialists at 1newhomes gather 7 tips for digital nomads on stepping onto the property ladder faster.

Buying a new home is an exciting, thrilling, yet demanding journey. It is little surprise that the most significant purchase in life goes along with several difficulties, especially if you work online, remotely, or as a freelancer.

Particularly due to the pandemic-related changes, the number of those working online increases, opening people convenience and flexibility of remote work. But digital nomads often face a few challenges when it comes to dealing with mortgages.

Property experts gather and explain 7 tips for online workers, freelancers, and digital nomads on stepping onto the property ladder faster and more successfully.

Prove your income – provide evidence

Digital nomads are self-employed, meaning that they need to provide different or extra evidence of their earnings than ordinary workers.

Since most lenders ask for a 3-year minimum proof of business earnings, longer working experience is better for online workers as well as for regular employees. Lenders might also require proof of current clients or planned projects as evidence that you have signed contracts.

Keep the contracts consistent

Flexibility is perhaps the first word that comes to mind when we think about remote and online work. It draws many people towards this flexible lifestyle, but lenders often view it as a risk.

One of the experts at Online Mortgage Advisor says lenders look for consistent workers who are reliable monthly payers. They might hesitate about borrowers with inconsistent contracts and gaps between jobs.

Thus being consistent, reducing time gaps, and minimising the number of large breaks can help ambitious online workers to come as reliable payers.

Organize the finances

Before taking the first steps in the property buying journey, it is sensible to analyse and organise your finance for two main reasons. 

First, it helps to estimate how much you can spend on a property purchase and realistically assess your options. You can then understand which properties fall within your affordability range and will not turn out a burden. Savvy buyers today use multiple services to find a new property in the capital, including finding London new builds on a map.

Second, it likewise helps to come as a reliable payer when being assessed by a lender. 

Many measures might result in better organisation of your financing. They include checking the credit score, cutting down unnecessary expenses, closing neglected accounts, paying bills, and making sure you have no current debts.

Prepare a larger deposit

It is no secret that larger deposits mean more appeal from the lender’s perspective. This is especially relevant for digital nomads, as larger initial investments result in lower mortgage values and monthly payments.

A typical deposit is 10-20% of the property value, but it is sensible to put down as much as possible. Those ambitious buyers with a short account history will benefit from larger deposits in particular since it might support lenders’ decisions on approving the applications.

Point out long-term contracts

Undoubtedly, lenders expect long-term security from the clients, so providing evidence of ongoing agreements and contracts might be crucial. Another option is to showcase previous long-term deals that might be secured again in the future.

Generally, self-employment implies a certain degree of instability. Thus, providing any contracts, documents, and proof that support your ability to repay a mortgage is essential, whether they are short-term or long-term.

Get help from mortgage experts

It is possible to go through the mortgage application all by yourself, especially with a decent credit score, history, and relevant knowledge. 

However, buying a new home is perhaps the most significant purchase in life and is a pivotal decision. Therefore, it often pays to hire a specialist. Self-employed workers fall into different criteria for lenders, so mortgage specialists can help avoid much hustle and nerve-wracking.

Mortgage brokers experienced in working with self-employed workers will reduce the chances of the application being rejected and affecting the credit history. Additionally, brokers have more connections to various lenders, so you might likewise get better interest rates.

Consider guarantor mortgages

A guarantor mortgage is a more secure and reliable type of mortgage. It means that a close relative takes a certain level of responsibility for your mortgage by offering their asset against the mortgage and agrees to repay it if you cannot.

Guarantor mortgages clearly involve additional risks for the guarantor. But they allow larger borrowings and higher chances for success when there is transparency and trust. If you are interested to learn more about this type of mortgage, consider contacting a specialist to find out what the process means for you and the guarantor.

Getting onto the property ladder is a challenging prospect for first-time buyers, especially if you are self-employed. But it is possible and hustle-free when it is well-thought-out and prepared for in advance.

Ambitious homebuyers today have multiple options to choose from, including mortgage purchases, the help-to-buy scheme, and shared ownership. Real estate is likewise not inferior in choice. For example, modern buyers in the capital buy completed or off-plan property in London or purchase secondary flats and houses.

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