Get the right advice on your Self Employed Home Loan

1.4 million Australians are Self-Employed, and the Majority of Them are Afraid to Take a Home Loan

According to the latest statistics, in August 2019, the total number of owner-managers with no employees reached 1.392 million. The number fell temporarily in 2020 due to the COVID-19 pandemic but has since recovered to 1.388 million in 2021, close to the previous high.

However, the proportion of owner-managers with no employees peaked at 12.6 per cent in 2002 and has steadily declined since then due to a variety of legal, demographic, and structural factors. Since 2012, it has averaged 10.6 per cent. Women have gradually increased their share of solo owner-managers, from 31% in 1991 to 37% in 2021.

The entrepreneurial spirit is alive and well in Australia. There are many individuals who take action for themselves to build up their dreams. One of those dreams is to buy your own home. 

Can you get a home loan if you are self-employed?

This is probably the question in the minds of self-employed individuals as they find ways to make their dreams come true and make the lives of their families better. But the simple answer to this is yes. 

You have to know that lenders see self-employed people quite uniquely. When you work for yourself, the lender will look at your business’s financial position in addition to your personal financial position. Banks and lenders may look at your income as “unpredictable”, which is why you should do your best to prove that you are a safe investment for them.

What you can do to improve your chances of approval

Pay your bills on time

If the broker sees that you are not missing bills, credit cards, or payments on other loans, then that will have a significant impact on your home loan eligibility. On the other hand, if you are missing bill payments, this may be a signal to the lenders that you are quite inconsistent.

Compile all paperwork

Without the proper documents, your application will only be delayed. You have to make sure that you’ve completed your tax returns in the past few years and arrange your financial records so that they can easily be interpreted.

Have your credit checked

This step is an important part of any application process since it can help identify which aspects need to be corrected. When you receive the report, let your mortgage broker know about them so that they can do a complete evaluation.

Keep things simple

Don’t make things complicated and keep things as straightforward as you can. There are many complex tax strategies around that can seem tempting at first, but these can be counterproductive because they can confuse the lenders, which can prevent you from securing the deal.

Talk to an experienced mortgage broker who has experience with self-employed applications.

It can be difficult to get a home loan when you’re self-employed, whether you’re a small business owner, contractor, tradesperson, or large business owner. That’s where The Mortgage Tree comes in, as we work with a number of lenders who can lend up to 80% of the property’s value without requiring tax returns or financials. 

All you’ll need is your most recent Business Activity Statement (BAS) and an Income Declaration from your accountant declaring their knowledge of the company and a reasonable estimate of its annual income.

Get the right help.

Buying a home is one of the most important purchases you will make in your life, so you need the right loan professional on your side to guide you through the process.

Here at The Mortgage Tree, we can help make the dream happen. I work with over 38 lenders, allowing me to search through over 200 financial loan products to find the best option for you, saving you the time and effort of doing it yourself.

Let me help you out. Reach out to me, and let’s discuss your home needs. Our email address is [email protected], and our phone number is 0410477511. Alternatively, you can use our contact form.