Securing a home loan when you’re self-employed can be a more intricate process, with additional requirements to meet.
Requirements for Self Employed Home Loan Applications:
When applying for a home loan, the specific requirements can differ among lenders. However, here’s a general guideline outlining common prerequisites you should prepare:
- Minimum 2 years of ABN registration.
- Personal and business tax returns along with tax assessment notices from the previous 2 years.
- Balance sheets and profit and loss statements from the previous 2 years.
- Information regarding any external liabilities, such as leases, hire purchase agreements, overdrafts, company loans, or guarantees.
- Last month’s business bank statements.
What if I have not been self-employed for 2 years?
For those who have not been self-employed for a full two years, obtaining a home loan can still be possible.
Lenders often seek this timeframe to understand your business’s income fluctuations and ensure income stability.
If you’re self-employed for less than two years, some lenders may require you to have industry-related work experience exceeding two years.
In such cases, providing old payslips and references from former employers can help demonstrate your work and income history before starting your business.
Low Document Home Loans
Low documentation home loans offer a solution for self-employed individuals who struggle to provide traditional proof of income required for standard home loans.
Low documentation home loans simplify income declarations and accept alternative income evidence sources, but they may come with higher interest rates and stricter loan-to-value ratio (LVR) limitations due to perceived increased risk to lenders.
While they don’t reduce the evidence of income, they offer alternatives to prove your financial capacity.
We are here to help!
Self-employed individuals seeking home loans may face unique challenges, especially if they haven’t been in business for at least two years. Get in touch with our experienced team of brokers today so we can help you navigate the complexities and secure the financing needed to achieve your homeownership goals.
Call us on 02 6162 2740 or email us at firstname.lastname@example.org to make an appointment today.