Finding a home loan when you’re self-employed

Finding a home loan when you’re self-employed

There are many perks to being self-employed, but when it comes to applying for a home loan, it seems being your own boss sends up a red flag to banks and other lenders.  Why? A salaried employee has a regular, steady income and is less likely to experience the cash flow volatility of a small business owner, contractor, entrepreneur, tradesperson or freelancer.

Yet by being proactive and accessing specialist advice, self-employed applicants can also enjoy a successful and hassle-free road to securing a home loan. Try these top tips for starters.

1. Seek expert advice

Trying to navigate the home loan landscape solo may not produce the outcome you desire.  A lending specialist is a good first port of call as they can provide valuable advice around the sort of documentation you will need to have ready before you submit your application.

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 you have time on your side, consider working with your accountant to lodge your outstanding returns.  If you want to take advantedge of an opportunity quickly, you may wish to explore the option of applying for a lite doc loan which requires less documentation than a traditional loan.

3. 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, errors or too many inquiries – these can hold up your loan application if they are not addressed in advance.

Taking the time to work out exactly how much you’d like to borrow is also a good idea. That way, you can hit the ground running when you meet with your mortgage lending specialist.

4. Think outside the square

While it’s a little more complicated for self-employed borrowers, getting a home loan can be easier than you’d imagined with the lending experts at Mortgage Direct in your corner.

Our success stories speak for themselves.

See Linda’s story:   We were able to provide financing for Linda to renovate her home and provide a separate unit downstairs which improved her property valuation and income.
And she did it so beautifully it was featured in House & Garden magazine.

Be like Linda.    Call us on 1300 360 999.