Home loans are a popular option for those looking to purchase their dream home. But if you are self-employed, you may feel like the cards are stacked against you. Many lenders will need more paperwork for self-employed applicants in their mortgage application process, and getting approved for a home loan can take more work.
At Lendstreet, we seek to make your lending experience easy and worry-free, no matter your situation.
If you are self-employed and looking to start your journey towards homeownership, get in touch for a quick consultation call and receive personalised assistance and unmatched service.
How Lendstreet’s mortgage brokers can help the self-employed
Most banks and lenders will concentrate on the financial state of the applicant. In many cases, being self-employed or owning your own business may mean that your income and revenues are not always consistent at a specific level, month on month. The lender will therefore ask for more proof that you can make consistent repayments if they grant you a loan.
Lendstreet’s mortgage brokers will assist you in creating an excellent application that showcases your financial state and its stability in the best possible way. We will help you highlight other attractive features about your income stream, assets, and current financial condition to ensure that lenders will see you as a credible and able borrower.
Each lender may have slightly different sets of requirements for those who are self-employed, but in general, they tend to look at the following factors:
- Details of existing assets (property, shares, cars, etc.)
- Details of existing liabilities (personal loans, car loans, credit cards, and other existing debts)
- Details of ongoing living expenses
If you are a business owner, most lenders will also request that you provide them with information about the financial state of your business or trade. This includes an extra set of documentation not generally required by non-self-employed workers. Usually, these include the following:
- Proof that your ABN has been registered for at least two years
- Last two years of personal and business tax returns and tax assessment notices
- Previous two years’ financials (Balance Sheet and Profit and Loss)
- Details of external liabilities (Hire Purchase, Overdrafts, Leases, company loans or guarantees)
Lendstreet’s mortgage brokers in Sydney will help you determine which lenders have the best loan package for your specific scenario. They will also inform you about whether you fit any particular exemption. Many lenders would accept applicants who have been self-employed for one year if they were previously employed in a company in the same field. However, if you have been self-employed for less than a year, most lenders cannot assist you with home loan products. If you have recently transitioned to self-employment, an alternative option is a low documentation (low doc) loan or alternative documentation (alt doc) loan. This loan type is only available through some lenders or banks.
Applying for a home loan while self-employed may seem complex and challenging, but with a trusted mortgage broker, you’ll be safe, secure, and well taken care of. When you work with Lendstreet, you receive our guarantee that we’ll do our best to find you the perfect loan product for your circumstances.
Easier and stress-free home loan applications with Lendstreet
While getting a home loan as a self-employed individual may be tricky, it is also fulfilling. If you want to start the home loan application process, talk to our trusted mortgage brokers at Lendstreet for the best chance. We can help you find the best available deals to suit your circumstances. We pride ourselves on providing personalised solutions and unparalleled guidance in the homebuying world.
Lendstreet has proven successful in helping our clients obtain the best home loans, no matter their financial circumstances. Contact us today to learn more about how Lendstreet’s professional mortgage brokers can help self-employed people access the best home loan products.
Frequently Asked Questions
Can I apply for a home loan if I’m self-employed?
Absolutely — self-employed people can apply for home loans. They may need to prepare additional paperwork, such as tax returns, profit and loss statements, and other financial statements. Many lenders require you to be self-employed for at least two years. Lendstreet is dedicated to making home loans accessible and worry-free for self-employed borrowers. If you’re unsure if you’re eligible for a home loan, reach out to our friendly team or fill in our online form.
How do I get approved for a self-employed home loan?
When you apply for a self-employed home loan, make sure you have all the relevant documents at hand, including:
- Tax returns
- Profit and loss statements
- Proof of balance
- Proof of existing assets
- Details of ongoing living expenses.
- Details of existing liabilities
- Proof of your ABN
Once you’ve prepared all relevant documents, a mortgage broker can assist you in determining which lender has the best loan package for your specific circumstances. If you have all the relevant documents and evidence, your chances of being approved for a self-employment home loan are high.
What’s the difference between a low doc and an alt doc loan?
Low documentation and alternative documentation are the same when it comes to home loans. Low doc loans are also known as alt doc loans — they are the same. There is, however, a difference between a full doc and a low/alt doc loan. A low doc loan allows you to provide less financial income to prove your income, assets, and liabilities. Low doc loans benefit those who have only become self-employed recently. In contrast, a full doc loan is usually recommended to those who have been self-employed for two or more years. Full doc loan borrowers will have access to all the income verification documents that a lender will need to approve their application.
What documents do I need for a low doc loan?
Usually, the documents that need to be included for this application are a declaration and proof of income through either:
- BAS Statements
- Bank Account Statements
- Accountants Declaration
Low doc loans are usually used in the following cases:
- You have not completed your latest tax returns
- Complicated company structure
- Income may have increased since your last tax return
While this may be an option, it is important to remember that providing low documentation may make your application appear as high risk to the lender. As such, they may offer you a home loan with a higher interest rate and more limitations on other features of the loan.
How can Lendstreet help me get a home loan if I’m self-employed?
Lendstreet mortgage brokers will get to know you and your specific circumstances and help you find the best available loan products for your circumstances. Reach out to our friendly team or fill in our online form — tell us about your lending requirements and employment circumstances. We’ll be in touch as soon as possible to explore your options.
What if I’ve been self-employed for less than a year?
If you’ve been self-employed for less than a year and want to take out a home loan, consider applying for a low documentation loan. However, low documentation loans are only available through some lenders and may make your application higher risk than a standard full doc loan. Some lenders will accept applicants who have been self-employed for one year under the condition that they were previously employed in the same field, so you may be able to successfully apply for a home loan after one year of being self-employed.