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Regardless of your income, if you are self-employed your loan application will probably look a little different. We understand that no two self-employed people’s situation is the same, so in this article we will look at two general scenarios, which could apply to you.
Scenario 1: Self-Employed With Full Financials
The first thing we look at is your financials, that is, your tax returns. Because you do not receive PAYG slips as a self-employed person, we will look at your tax returns to determine how much you are earning. If your tax returns demonstrate that your company or business is profitable, we may still look further into your finances so we are sure that you can afford the loan. If everything looks okay, we can go ahead with a full documentation loan application.
Scenario 2: Self-Employed Without Full Financials
If you do not have up-to-date financials, we will look at your situation from a low doc point-of-view. This means we will need alternative documentation in order to confirm your income, such as bank statements, accountants’ declarations etc. Usually about six to twelve months of bank statements are required. We look at your cash flow in order to calculate both your income and expenses. If this documentation proves that you can afford the proposed loan, we can go ahead with a low doc loan application. There are many low doc/alternative doc products on the market, so there will probably be something out there that will suit your circumstances.

5 Tips To Help With Your Loan Application

  • Aim for about six months of high income and low expenses. Building a solid history will help both brokers and lenders see that you can afford the loan.
  • Minimise your debt.
  • Demonstrate a history of savings. This shows that you are sensible with your money, and serious about your loan.
  • Keep your accounts and taxes up-to-date. This way, you can easily show a broker or lender your current income.
  • Remember, just because you are self-employed, a low doc loan may not be the best option for you.
As long as you have documentation that can prove you can afford the loan you need, being self-employed shouldn’t be an issue.  It all comes down to choosing the right lender and presenting the information correctly.
We’ve had a lot of experience at this, so if you’re self employed and would like help securing a loan we would be more than happy to help.
Give us a call on 02 9068 6644 or fill out the enquiry form here.

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Alex Sperling - Finance/Mortgage Broker

Alex Sperling - Finance/Mortgage Broker

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