Self Employed Home Loans
Self-employment can come with its challenges – including navigating difficult lending regulations.
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Challenges
The Challenges of Self-Employment
Self-employment is an exciting opportunity. More freedom, more room for growth – the benefits can be endless! But there are some definite hurdles involved, especially when it comes to certain financial obstacles. Applying for a home loan is a natural step toward the next chapter of your life, but the application process can be demanding.
If you’re self-employed, this is especially true. How can you prove to home loan lenders that your self-employment can support your application? What makes self-employed home loans so different from standard loaning processes?
Why so tricky
What Makes Self-Employed Home Loans So Tricky?
With such extensive time frames, these requirements make it very difficult for self-employed professionals to acquire home loans, especially within the first two years of business. This can also affect your ability to pursue your personal goals such as acquiring your first home and set you back in your life’s progression.
The reason why banks are hesitant to lend to new business owners (less than two years of ownership) is simply that a new business is considered a risk and could jeopardise their investment. Following this ideology, new businesses are sometimes penalised with higher interest rates, or traditional lenders will lend lower LVR’s (loan to value ratios) in the rare case where the loan is approved.
Options
Our Self-Employed Home Loan Options
If you have been self-employed for over two years, there are home loans readily available for you. Although it will still take a range of paperwork and information to properly apply, you are at least in a fortunate enough position to have plenty of documentation available.
At Mel Finance, we have extensive experience helping self-employed people find the perfect home loan for their circumstances. This will involve helping you to organise all the different forms of paperwork that will need to be supplied in order to give a comprehensive picture of where your business is at. The paperwork may be extensive, but with our support, you won’t need to worry about a thing.
There are low-documentation (low-doc) loans available on the market and we can help you find these lending options, which could save you time and money. As these require less documentation, they often make home loans more accessible for self-employed individuals who have only been working for under two years. Low-doc loans can be a challenge to organise, but our team can help you apply for them. Mel Finance, your local qualified Melbourne mortgage broker, can aid you in taking your first steps toward owning your own dream home. In the past, our firm has worked with many sole traders and trust companies from different industries and our daily experience has acquainted us with the detailed knowledge of acquiring a loan. Thus, we understand that each individual case is different and hence tailor the process to match your requirements.
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Requirements
What Do I Need to Apply for a Self-Employed Home Loan?
Cover the basics of documentation and requirements, then stress that Mel Finance can guide you through applying for a self-employed home loan can involve a lot of paperwork. As opposed to your standard fixed-rate home loans, a financial institution needs more information to approve a home loan specifically tailored for a self-employed person. This involves a wide range of different forms and proof of employment, confirming not only your present income rates but also the likelihood of continuing success over the next few years.
This paperwork will likely include:
- Proof that your ABN has a minimum of two years of registration
- Two years of personal income tax returns, business tax returns, and any tax assessment notices
- Business bank statements for the last month
- Details of any external business liabilities, including leases, overdrafts, company loan repayments, hire purchase, and more
- Profit and loss statements covering the last two years
Don’t get overwhelmed by the process. Here at Mel Finance, we have helped countless self-employed Australians navigate the complications of receiving a home loan, organising lenders mortgage insurance, finding the right interest rate, and more. If you’re looking for a home loan specialist to ease the confusion, Mel Finance is ready to lend a hand.
FAQ
Your Self-Employed Home Loans Questions Answered
Getting a loan as a sole trader or small business owner may seem more daunting than it really is. There are plenty of loan options available, and the right expert will be able to guide you through the process quite easily.
Generally speaking, there are a few key things you will likely need to provide to prove your self-employment for home loan purposes. This may include providing tax returns, financial statements, business registration documents, and more.
Banks will typically use personal income tax returns to calculate how much you earn and the projected success of your business.
Self-employed borrowers looking for a low-doc home loan are required to have a maximum borrowing capacity of 80%.
why choose mel finance
Why Choose Mel Finance?
Industry Experience
We bring more than 12 years of experience to the table, ensuring that we have what it takes for our clients to reach their financial goals.
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Client Focused
You are our top priority at Mel Finance. We will be focused on your objectives and requirements every step of the way.
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Melbourne Specialists
Our knowledge of the property market here in Melbourne is second to none - we’ve been helping Melburnians buy property for years.
Build Your Future
Build Your Future With a Home Loan
Being self-employed takes courage. If you have built yourself a successful income, you deserve to be able to access an impactful home loan. The specifics of your employment shouldn’t be a hurdle that prevents you from getting the home you’ve been dreaming of. By partnering with a home loan specialist, you can find a home loan that best suits your situation and helps you achieve your goals.
We’ll analyse the options for you and walk you through the entire process, always available to answer questions and compare non-bank lenders, residential home loans, and interest rates until we find the right self-employed home loan for your situation. Your future starts today – and we can’t wait to help you build it.
client testimonials
See What Our Clients Are Saying
Book an Appointment With Mel Finance to Find a Home Loan
Earning a self-employed home loan is a detailed process. For too many people, all the hoops they have to jump through can put them off from ever starting the journey. Luckily, you don’t need to tackle this challenge alone. By working with Mel Finance, you can benefit from the experienced advice of a home loan expert. We care about equipping people with everything they need to kickstart the rest of their lives with a home loan, helping them navigate the application process, and finding an option with both principal and interest repayments at beneficial rates. Call us today or book an appointment to discuss your home loan needs further.