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  • Self employed home loan challenges and how to overcome them

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    Being self employed can be brilliant – you're your own boss, you set your own hours and decide how you want to work each day. However, every self starter will know that there are plenty challenges involved that can take some getting used to. 

    Apart from overcoming the temptation to constantly take four day weekends, securing a home loan when self employed may be one of the trickiest. Here we look at why that is and what you can do about it now. 

    Securing a home loan when you're self employed is possible with the right advice. Securing a home loan when you're self employed is possible with the right advice.

    Self employed home loan challenges

    When you're self employed, you may not have the income and employment documentation that most nine to five Australians do. Banks usually require these documents when approving a home loan, which can make things difficult.

    A recent survey of 1,000 self employed Australians with home loans by Hashching found that this often leads to them getting a bad deal and paying 1, 2 or even 3 per cent more interest than they need to. 

    Luckily buying a home when you're self employed (and not being ripped off on your home loan) is very much possible.

    Luckily buying a home when you're self employed (and not being ripped off on your home loan) is very much possible – you just need the right advice and strategy. 

    The essentials: Buying a home when self employed

    Most lenders aren't risk takers. And unfortunately since you may not have proof of a guaranteed pay cheque, you present something of a repayment risk in their minds.

    For that reason they may try and charge you more in interest – which is one of the most frustrating self employed home loan challenges.

    Having a professional negotiator and mortgage expert by your side from the team here at Mortgageport should be your first step. We deal directly with dozens of lenders, we know how they work and we know how to find the most suitable home loan for you – without the sky-high interest rates.

    Don't let being self employed stop you from buying a home. Don't let being self employed stop you from buying a home.

    Next you need to get your affairs in order. You'll usually need at least the following:

    • A business activity statement for the last 12 months, verified by the Australian Taxation Office. 
    • You may be asked for statements showing your personal transactions over a period (usually six to 12 months).
    • The last two years of your company and personal tax returns.
    • Documentation proving how long you've had your ABN and GST registration.
    • A 20 per cent deposit (you may have to pay lender's mortgage insurance if you have under a 40 per cent deposit).

    Once you've got those documents in order you're good to go. If you need any help preparing, get in touch with the team here at Mortgageport – we're happy to talk you through everything.

    From there we'll work with you to understand your business and your needs. Using that understanding, we'll personally tailor a loan to suit you to make sure that it suits your needs to a tee. 

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