Mortgages for Self Employed

Freelancers, sole traders or contractor? Founder of your own company? We take our hats off to you. 

But for not always entirely rational reasons, lenders have become less eager to issue loans to self-employed borrowers in recent years. Unlike earlier practices, self-employed borrowers now have to go through a rigorous process to prove their creditworthiness. 

The process of securing a loan is much more complicated for a self-employed borrower compared to a payday employee. This is due to the fact that the lenders see payday employees as low-risk borrowers. We will work closely with you to prepare a solid loan application that will meet all the requirements and criteria set by the lenders.

How Long Should You Be Self Employed?
For lenders to decide if and how much they will be borrowing you, the first thing they look into is how long you've been in your business. Most lenders in Canberra would only consider your application if you've been self-employed for at least two years. They do this to know how stable your business is. But with our help, you can still get a loan if your business is less than two years old. Our good relationship and experience with several lenders mean that we can always find one who will lower their requirements for our clients.

Where There's A Will There's A Way

If there's one thing you've learned as an entrepreneur it's that there's always a way. We've learned that too!

For self-employed borrowers who have been in business for one to two years, the solution is much simpler. Lenders have different structures and we will find one that will approve your application. What we will require is a year's account history and paperwork to show that you are not completely new to your business. Your previous employment would have to be in line with your new business for this to be possible. The process would be much more difficult if you have not been self-employed for up to a year but it's not impossible. We will provide your income history from your previous employer to prove your creditworthiness.

Declaring Your Income - Sometimes It's Less What You Say and More The Confidence With Which You Say It!
Lenders just want to see stability in your business and in your ability to repay a loan. They're a conservative bunch but they want to lend. They're looking for opportunities to lend and write home loans. That's how they make money. Getting approval is about giving clear answers to specific questions. 

There are a number of ways by which this can be done. When looking at your income to determine your suitability for a mortgage a lender may decide to use the last income available on your tax return. A lender may also decide to calculate and use the average of your income from the last two years. It is also possible that it is the lowest of your income from the previous years that is used. We will ensure that your application meets the requirement of whatever lender you choose.

Low Doc Loan Options
This option is available for self-employed borrowers who do not have the required paperwork to obtain a loan. Very few documents will be needed in this process. The documents you will have to provide include a signed declaration of your income and your business activity statement. Your declared income is used instead of your financial history. Due to the lack of full documentation, the process is faster and much more convenient. One con of low doc loans is that they come with a higher interest rate but this shouldn't discourage you as you will be able to switch to a full doc loan in the next two to three years.