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Home Loan for self employed

Home loans for self employed people are slightly more onerous than for employees. There is more information that you need to provide to your mortgage broker to provider to the most suitable lender to your circumstances. So read on and learn a bit about what is needed to secure a self employed home loan.

Home loans when self employed are slightly harder that when you’re an employee, however engaging a mortgage broker will assist in obtaining a home loan easier. For information in relation to how to obtain a home loan when your self-employed, read on! 

Owning a home is a dream that Aussies aspire to achieve. However, for self-employed people, obtaining a home loan can be more challenging than for those who are employees of a company. This is because banks view self-employed people differently when it comes to home loans, and they also look at the financial position of the business as well as the individual’s personal finances.

If you are self-employed and looking to apply for a home loan, there are a few things you can do to make the home loan process smoother.

Remember, you can always reach out to your mortgage broker for a preapproval for your self employed home loan.

What information will you need?

The first step is to gather all the necessary information that the bank will require to assess you for a self employed home loan. This includes providing information about your business separately from your personal finance information.

Here are some of the key pieces of information that banks typically require from self-employed borrowers when they are assessing a home loan for self employed. It is best to pull this information together to provide to your mortgage broker to review prior to sending to a bank.

Self employed Business Information:

  • Financial statements for the business for the past 2-3 years, including profit and loss statements and balance sheets
  • Business tax returns for the same period
  • Details about the nature of the business, including its structure (e.g. sole trader, partnership, trust or company)
  • Bank statements for your business for that period
  • Information about any other loans or debts the business has including credit cards, assets on hire purchase or lease

Self employed Personal Information:

  • Personal tax returns for the past 2-3 years
  • Bank statements for all accounts (business and personal)
  • Proof of income, including any dividends or other income streams
  • Information about any other loans or debts you have including credit cards, car loans or personal loans

What to do next

Once you have gathered all the necessary information, you can begin the application process by contacting a mortgage broker or you can go direct to a bank. Keep in mind that banks will assess your self employed home loan application based on their criteria for risk and affordability. Having strong positive cash flow in your business will help with your home loan for self employed.

As a self-employed borrower, you may need to provide more information than someone who is employed by a company. This is because banks want to ensure that you have a stable income stream and are able to service the loan repayments over the long term.

One way to increase your chances of being approved for a home loan is to work with a mortgage broker. A mortgage broker will be able to guide you through everything you need to collect and be able to present the information to the bank in the best possible way help you get a home loan for self employed people. They can help you find a lender who is more likely to approve your application and may be able to negotiate better terms and interest rates.

In summary, obtaining a home loan as a self-employed borrower requires more information than for those who are employed by a company. It is important to gather all the necessary information and provide it to your mortgage broker, ensuring both business information and personal finance information is complete. Working with a mortgage broker can also increase your chances of being approved for a self employed home loan. With some effort and patience, you can achieve your dream of owning a home as a self-employed business owner.

One Click mortgage brokers are here to help you!

One Click Life makes it simple to track and organise all your life’s admin in one place. Operated by finance and tax professionals, One Click Life allows you to complete a simple mortgage application so our team of mortgage brokers can best advise you.

Dealing with an online mortgage broker is the easiest way to complete your home loan for self employed. One Click Life can also help with your Mortgage, Will, and Health Insurance, so you can spend more time on things that matter.