Freelancers can also own a home

WHAT YOU NEED: GET YOUR AFFAIRS IN ORDER To qualify for a loan you need to show you can comfortably afford the monthly bond repayments.

Freelancers, contract workers, sole proprietors and small business owners have no reason to believe they’ll never own a property. Being organised and having your affairs in order is the first step and already gives you a great advantage.

A number of documents must be submitted with your home loan application; ensure they’re accurate, up to date and in order:

A letter from your accountant confirming your personal monthly income;

Financials covering your income and expenditure over the last two years of working or trading; A 12-month cash-flow forecast; A list of assets and liabilities; Personal and business bank statements for at least six months;

Your latest IT34 (serves as Sars confirmation that your taxes are in order);

Company registration and/or statutory documents, if applicable; and

ID documents of fellow business directors, if applicable.

You’ll have great difficulty having your home loan application granted if you have taxes outstanding.

Seek a tax consultant or professional accountant’s assistance if needs be.

A clear credit record is one of the main building blocks of sound personal financial management, and one of the first things to be scrutinised when you apply for a home loan.

Bad credit, which typically results from defaulting on payments and loans, filing bankruptcy and unpaid judgements, decreases your chances of having your credit application approved.

Consider running your own credit check before you even apply for a home loan. All South Africans are granted one free credit check a year.

If you do have an unfavourable credit record don’t despair – it’s possible to restore your record, though its best to seek expert advice on how to do this most efficiently.

To qualify for big credit it’s sometimes, ironically, useful to have small credit. For this you could open a store account and use it a couple of times, but ensure you pay it off in full and on time.

Having a deposit to put towards your bond can be of great help in securing a loan. Showing that you have substantial savings demonstrates that you’re financially responsible and thus likely to honour the bond repayments on a monthly basis.

Keep your personal and professional finances and admin separate. Tax law does allow for certain personal expenses resulting from running a business to be claimed as such, rather than as part of a taxable salary, but this could appear as inflating your income, which could count against you.

Credit, finance and admin in general can be tricky, so rather recruit the help of the experts – be it a tax consultant, accountant or trusted property advisor.

It’s also highly advisable to use a mortgage originator as this increases your chances of success. Steven van Rooyen is principal at Leapfrog Milnerton