Joseph, a vibrant 20-year-old with a hunger for success, had achieved what many his age wouldn’t dare dream of – becoming a real estate agent and securing a comfortable income. Despite being just over a year into the profession, his talent and dedication brought him an average monthly income of RM8,000 to RM10,000.
Unlike most young adults his age, Joseph was frugal. He lived with his supportive parents, didn’t own a car, and hadn’t even applied for a credit card yet. His ambition, however, wasn’t just about financial security; it was about owning his own home.
While his friends were busy exploring the world of travel and gadgets, Joseph embarked on a different kind of adventure – the journey towards homeownership. He knew being young and self-employed meant facing additional hurdles in securing a loan. However, the thought of owning his own space fuelled his determination.
His first step was research. He spent hours scouring the internet, attending informational sessions, and even consulting a financial advisor. He learned about the specific challenges freelancers faced, like the lack of traditional payslips and the need to prove income consistency. Armed with knowledge, Joseph started preparing his arsenal.
Undeterred, Joseph embarked on a journey of research and preparation, learning about the specific challenges freelancers faced:
Understanding the Challenges
- Income Fluctuations: Banks assess borrowers’ ability to repay consistently, and fluctuating income can raise concerns.
- Limited Documentation: Traditional proof of income like payslips might not be available, requiring alternative documentation like tax returns and bank statements.
- Business Concerns: Certain businesses, like massage parlours or nightclubs, might be viewed as risky by banks.
- New Businesses: Startups with less than two years of operation raise questions about financial stability.
Building a Strong Foundation
Armed with knowledge, Joseph took proactive steps to strengthen his application:
- Organized Financial Records: He meticulously collected and organized all crucial documents like income tax returns, bank statements, and commission statements for the past year.
- Registered His Business: Adding legitimacy to his income, he registered his business with the Suruhanjaya Syarikat Malaysia (SSM).
- Built Credit History: While avoiding unnecessary debt, he applied for a secured credit card with a low limit and used it responsibly to build a positive credit score.
Presenting a Strong Case
With a well-prepared application, Joseph approached banks known for working with self-employed individuals. He confidently presented his case, highlighting:
- Consistent Income: Backed by organized documents, he demonstrated consistent income flow through his commission statements.
- Responsible Lifestyle: He lived frugally, not owning a car and living with his parents.
- Future Growth Potential: He emphasized his potential for future income growth in the real estate industry.
- Additional Income: He even included rental income from a small property co-owned with his parents, further strengthening his financial profile.
The process wasn’t without its challenges. There were moments of frustration and self-doubt, but Joseph persevered, driven by his dream. Finally, after months of dedicated effort, he received the news he’d been waiting for – his loan application was approved!
Your Roadmap to Homeownership
Joseph’s story serves as an inspiration for young freelancers like him. It demonstrates that even with unique challenges, homeownership is achievable with the right approach. Here’s a summary of the key steps Joseph took, which you can use as a roadmap to your own dream home:
- Organize Your Financial Records: Gather all crucial documents like income tax returns, bank statements, and anything that proves your income. Consistency is key, so ensure they’re up-to-date and well-organized.
- File Taxes on Time: Regular tax filing demonstrates financial responsibility and transparency to lenders.
- Provide Proof of Consistent Income: If you’re a freelancer, gather documents like commission statements or contracts to showcase consistent income flow.
- Register Your Business (if applicable): Registering your business with the SSM adds legitimacy and strengthens your application.
- Improve Your Debt Service Ratio (DSR): Lowering your DSR by paying off existing debts or utilizing savings can significantly improve your chances.
- Show Additional Sources of Income (if available): If you have rental income or a partner with a stable income, including it can strengthen your financial profile.
- Demonstrate a High Net Worth (if applicable): Owning assets like savings, fixed deposits, or even existing property can positively impact your application.
- Check Your Loan Eligibility: Utilize online tools offered by various banks to assess your eligibility before applying formally.
- Build a Strong Application: Consider opening a dedicated savings account to track your income.
- Maintain Consistent EPF Contributions: Regular contributions to the Employees Provident Fund (EPF) demonstrate financial stability and long-term financial planning.
Remember, with planning, preparation, and a little bit of financial savvy, you too can achieve your dream of owning a home.
Disclaimer : This website provides all information on an “as is” and “as available” basis. It is important to note that any use of this information is at your own risk, and we are not responsible for any damages or losses that may arise from such use.
