Getting a home loan when you're self employed
There are many perks to working for yourself, but when it comes to applying for a home loan it can seem like being your own boss is a red flag to lenders. By being proactive and accessing specialist advice, self-employed applicants can also enjoy a successful and hassle-free road to securing a home loan.
Our tips for self employed applicants:
1. Seek expert advice: Trying to navigate the home loan landscape solo can be time consuming, frustrating, and may not produce the outcome you desire. Having an experienced adviser on your side can save you time & money, and can provide you with solutions that you may not have ever been able to discover by yourself.
We can provide you with an overview of which lenders on our panel are most comfortable lending to self-employed applicants (and who will give you the best interest rate). We can explain what sorts of loan products are available to you, and which lenders have loan products that suit your requirements, and existing documentation (for proof of income etc). We then guide you through the application process while liaising with the lender to ensure that your loan is approved as quickly as possible.
2. Get your affairs in order: Many lenders will lend to self-employed borrowers who provide their full business financials. This generally includes your personal and business tax returns for the past two years. If you have these documents on hand – and they reveal a fairly consistent income – applying for a loan should be relatively straightforward.
However, the hectic schedule that comes with running your own business means many self-employed borrowers’ tax returns are not up to date. If this is the case, and you are in a hurry, there are still options available to you. Call us on (08) 8224 0044 to find out.
3. Consider a low doc loan: Low doc loans are offered by a wide range of lenders and, as the name suggests, require less documentation than traditional loans. Many low doc loans only require 12 months of business activity statements instead of full financials, or a declaration of affordability which has been signed by your accountant. Depending on the lender, low doc loans may only be available at a lower loan to property value ratio (LVR), which means you may need a larger deposit.
4. Do your homework: Checking your credit history is a good step for anyone applying for a home loan. If you’re self-employed, it’s definitely worth taking the time to make sure your credit history doesn’t include any defaults or errors as these can hold up your loan application if they are not rectified in advance. If you would like to request a copy of your credit report, please contact us on (08) 8224 0044.
