Home Loan Application Tips For The Self-Employed

There are many benefits to being self-employed. However when it comes to applying for a home-loan, those who are self-employed face a little more scrutiny.

This is not to say that being self-employed lowers your chance of getting a home loan - all that is required is a more organised and thorough approach when you’re approaching lenders.

Lenders are generally more cautious when it comes to those who are self-employed - compared to PAYG employees, a broader insight into finances and financial history is required.

But, wait, do not let this scare you off - follow these tips and you’ll find your home loan process will be a lot easier.

1. Be completely transparent and thorough in your finances
   
   
   When applying for a home-loan as someone who is self-employed, the more consistency you present in your income, the more attractive you will look.
   
   If you can show consistency over a longer period of time (we suggest two years), the lender will feel far more comfortable lending you the money - your risk profile decreases - to the banks, the past may in deed predict the future.
   
    
2. Apply for your loan with BAS statements
   
   Using your business activity statements in your home loan application will undoubtedly serve the lender with more insight into the finances at your disposal. This is only applicable when you are the owner of the business - to the point where finances are accessible to you.
   
   BAS statements offer a magnification on your businesses finances, and will make your application stronger upon the watchful eye of the lenders.
   
    
3. Obtain a Borrower Certificate of Income Declaration
   
   Talk to your accountant about obtaining a Borrower Certificate of Income Declaration - which effectively means they vouch for your income. Ultimately, this is only appropriate when you have had a long-standing relationship with your accountant - your accountant effectively estimates what your income is pre-tax, possessing a well-versed knowledge of your business and its finances.