There is a common misconception that if you are self-employed obtaining a home or investment loan is difficult. It can be harder, but it isn’t always.
In today’s workplace, more and more people are self-employed and most lenders have adjusted their policy to suit demand it’s just a matter of knowing which lender’s policy will best cater to your situation.
The real difference between a self-employed borrower and a PAYE borrower is that it’s more difficult for a bank or lender to establish whether you can afford to meet your mortgage repayments down the track. This is why it’s important to work with a mortgage broker who is experienced in packaging and presenting loan applications for self-employed borrowers – they know what the bank is looking for and how to present your case comprehensively.
Lo-Doc or Low Documentation loans are often promoted for self-employed home loans and whilst this option may be right for you it may not be the only option.
Lo-Doc loans can combine all the features of a standard variable or fixed rate loan and include access to:
- Flexible repayment options
- Redraw Facility
- Mortgage Offset
The lender will typically need the following documentation to support your application:
- An ABN that has been active for at least 12 months or Certificate of Incorporation
- Business Activity Statements (BAS) for the past 12 consecutive months, obtained from the ATO and inclusive of lodgement receipt number
- Confirmation that your income has been registered for GST for a minimum of 12 months
- Six months’ worth of statements for your primary business or personal transaction account
Lo-Doc Loan Considerations:
- The maximum amount you can borrow on a Low Doc Home Loan is 80% of the property value
- If borrowing more than 60% of the property value Lender’s Mortgage Insurance (LMI) will be required
- Lo-Doc loans traditionally carry a higher interest rate
We work with small business owners and independent contractors on a daily basis and are experienced in sourcing home finance for self-employed borrowers. We can show you a range of competitive loan options, give us a call on 07 3899 2866 or make an appointment today, you might just be surprised by what is available to you.