An increasing number of people who are self-employed believe that they cannot get a home loan. But, the reality is different. You can get a home loan but you just have to work a little bit harder and pay close attention to the details.

Tips to help you get Home Loans for Self Employed Australians

Here is a list of useful tips to help you when you are trying to get home loans for self employed Australian applicant:

1. Speak to a Professionally Qualified Expert Finance Broker for home loans for Self Employed

If you do not work with a professionally qualified expert finance broker, you will have to consider the possibility of wasting your valuable time by running around on your own trying to find a home loan that best meets your needs and circumstances. But, a finance broker will save your valuable time because he/she has complete knowledge of how loan for self-employed applicants work.

2. Establishing your Borrowing Power

Seek help from a professionally qualified finance broker and know the amount you can borrow from a lender/credit provider.

3. Determining your Serviceability

When assessing your eligibility for a home loan as a self-employed applicant, traditional banking institutions will look for consistency of income as they want to see that:

  • You are a business owner or a partner
  • You maintain a steady income and that your level of income is suitable to meet their minimum servicing requirements
  • Your business has been ticking along steadily and you have been trading in your current business for at least 24 months.
  1.  Verifying your IncomeTraditional banking institutions will require your most recent two years’ Personal and Business Income Tax Returns. Profitable tax returns are just one example of how you can verify your income. There are alternative ways to show that you can afford a loan as a self-employed applicant, for example  a Low Doc Home Loan:One way is via your Business Activity Statements (BAS). Your BAS shows the sales and both capital and non capital expenses of your business. BAS reflects the current status of your financial situation. As it is completed either monthly or quarterly, it is considered to be an applicable source of income verification by other non-bank lenders/credit providers.
  2. Another way is to supply last 6 months of your business bank statements which can verify your positive cash flow. Also your income can be verified is to have your accountant speak with a non-bank lender/credit provider so they can confirm with each other the state of your business’ financials.

Note: Tax returns are considered to be the most common and traditional form of income verification for self-employed applicants. You should, however, keep in mind that if you verify your income in an alternative way, some non-bank lenders/credit providers may charge a higher interest rate.

6. Other Factors to Consider

Banking institutions may decline you because:

You may be unable to provide business financial statements that prove your ability of paying back the home loan or being a self-employed applicant, you lack a regular income or you have been in business under 2 years.

You may be recovering from a bad credit history or bad credit file which can happen when you are self-employed (i.e. it may be that the bad credit history was a result of mitigating circumstances beyond your control).

Note: Even if you have an impeccable credit file, a traditional banking institution can deny you a loan, simply because you are self-employed and you have an unreliable income.

Being self employed, you may have realized on a number of occasions that you have to jump through a number of hoops just to get a home loan from the traditional banking institutions. But, do not lose hope, get in touch with an expert finance broker and get ready to work for obtaining a home loan easily.

Non Conforming Loans is a team of professionally qualified, highly experienced and expert finance brokers It will help you in finding a low-doc home loan for self-employed and help you buy a home or property.