Home Loans for the Self Employed
The credit crunch and resulting squeeze on liquidity, coupled with the Australian government's recent crackdown on responsible lending, has made it harder for the self-employed to secure a home loan.
There are a wide variety of home loans available to those with conventional jobs and documentation of income. But what do you do if you are self-employed or you just don’t have the paperwork on hand to prove your annual income? With one in 10 Australians now self-employed, there is still a strong industry servicing this sector and opportunities are still available for self-employed borrowers - they just need to know where to look.
Here are a few steps that will help self-employed applicants find a home loan to suit their needs:
- Talk to a Specialist Broker: A Mortgage Broker who specialises in obtaining finance for self employed can assess your financial situation and help find a loan that suits your needs. They're a good starting point for Self-Employed Borrowers as they know which products to offer you that have the best chance in getting you approved. They can also give you a range of other information to help make the process of securing financing more simple, and importantly, less stressful without you wasting time filling out applications then being rejected because you do not meet the lending criteria of that particular funder.
- Keep records: Ensure all your business records are up-to-date, simple to review and well structured - and this in not just for tax purposes. If you can highlight a savings history, regular income and a functional, well structured business that turns a profit for at least a two year period, you will significantly broaden your borrowing opportunities.
- Look beyond the banks: Non-bank lenders, including credit unions and building societies, may offer low doc and other loan products not offered by the banks. They may also have different requirements, some lenders require BAS statements for 12 months while other lenders only require a signed borrowers income declaration. So it pays to see what the alternative lenders are offering.
- Serviceability: Self-employed borrowers can be attractive to lenders if they can demonstrate ability to service a loan, regardless of business/cash flow fluctuations. Highlight other commitments you've been able to service on a regular basis. Again, your specialist broker can help package up a good case for securing finance.
There are a variety of companies that offer these types of loans and interest rates and fees can vary. When you invest a little time and effort by doing your homework, you can find a Self Employed Loan or a low doc home loans that are right for you. Once you find the best loan for your unique situation it will be well worth it
Non Conforming Loans www.nonconformingloans.com.au specialise in obtaining approvals for Self Employed Applicants in both Full Doc & Low Doc.
Source: Non Conforming Loans
August 2010
