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4 Tips for Getting a Home Loan if you’re Self-Employed

Did you know that more than 2 million Australians are self-employed? While running your own business or juggling a variety of freelance jobs is on the rise in today’s world, there is still a stigma around how this job choice may affect future home loan application prospects. But in reality, around 1 in 3 home loan applications are from customers who are self-employed. 

The good news is, it isn’t as hard as you may have heard and there are plenty of things you can do to prepare yourself for when you’re ready to apply for a home loan. Here are the best 4 tips that any self employed borrower can follow to get a home loan.

Tip 1: Stay on top of your tax returns

We can’t stress this enough! Because you may not have a regular payslip, lenders will rely on formal tax assessment documents to confirm your income. 

Two years of tax returns is preferable to demonstrate a history of income. If you’re new to working for yourself, you may need to wait at least 12 months before you pursue buying your dream home. In the meantime you can save, save, save. 

Tip 2: Don’t stress about patchy cash flow

Irregular cash flow is almost a given when you’re self-employed. Some weeks you can be rolling in cash and others you have a flood of bills.

The good news is that lenders will look at your total income for the year as a whole, rather than a weekly or monthly basis. 

Tip 3: Explore low-doc loan options

If you don’t have up-to-date tax returns, low-doc loans could be an option for you. A low-doc loan allows you to provide other evidence such as business activity or bank statements to prove income instead. Sometimes however, low-doc loans do come with a higher interest rate. 

Tip 4: Talk to a mortgage broker early

Just because you aren’t quite ready to purchase yet doesn’t mean you can’t speak to a mortgage broker about setting you on the right path. By coming up with a plan early, will give you a goal to work towards and will allow you to take the necessary steps to being a homeowner, all while working for yourself. It is entirely possible if you set your mind to it!

If you’re a self-employed individual, Coronis Finance can help with your home loan. Book a time to speak with one of our mortgage brokers or let us know what you’re interested in and we’ll get right back to you.