Accounts You Need When Applying for a Self-Employed Home Loan
Applying for a home loan when you’re self-employed can sometimes be more challenging than you’d find it as a PAYG employee, but with a bit of planning and preparation you could still find a mortgage with a competitive rate.
To gain access to the most lenders when you’re looking for a self-employed home loan, the documents you’ll need are:
- Financial Statements for the last two years
- Certified Tax Returns for the last two years
- Your Tax Assessment Notice
With access to all of these you should be well on your way to securing a great mortgage deal, but if not read on and find out how you can still qualify for a home loan that works for you…
Read on or click a link to jump ahead:
Save time and money with an expert who specialises in cases like yours
[/vc_column_text][vc_row_inner][vc_column_inner width=”1/3″][/vc_column_inner][vc_column_inner width=”1/3″][tek_button button_text=”Get Started” button_link=”url:https%3A%2F%2Fwww.onlinemoneyadvisor.com.au%2Fcontact-us%2F|||” button_position=”button-center”][/vc_column_inner][vc_column_inner width=”1/3″][/vc_column_inner][/vc_row_inner][vc_empty_space][vc_separator color=”purple”][vc_empty_space][/vc_column][/vc_row][vc_row full_width=”stretch_row”][vc_column offset=”vc_hidden-lg vc_hidden-md”][vc_separator color=”purple”][tek_calltoaction cta_icon_type=”no_icon” cta_title=”We’ll match you with your perfect mortgage broker” cta_subtitle=”Save time & money with an expert who specialises in cases like yours.” cta_text_color=”#000000″ cta_button_link=”url:https%3A%2F%2Fwww.onlinemoneyadvisor.com.au%2Fcontact-us%2F|||” cta_button_text=”Get Started”][vc_empty_space height=”50px”][vc_separator color=”purple”][/vc_column][/vc_row][vc_row][vc_column][vc_column_text]Mortgages for self-employed with two years accounts
If you’ve been self-employed for two years or more, and have accounts and tax returns to support your home loan application, you should be able to find a competitive deal. The key to successful borrowing when you’re self-employed is to find the lender who will calculate your affordability in a way which best suits your circumstances.
With two years of account you should be able to borrow up to 95% of the property value, so you may need only a 5% deposit.
With two years of accounts to accompany your home loan application, you should have some choice as to which lender to apply to. The decision may come down to lending criteria and the way a lender will calculate your affordability.
For example, one lender may assess your affordability by looking at the lowest income figures for the last two years, while another might base their calculation on the income shown on your most recent tax return. Other lenders will have a more obscure approach and use an average of two years of income or offer 120% of your lowest year’s income.
Occasionally lenders will add back expenses shown in your returns. And these are just a few of the ways you might find a lender looking at what they might be able to offer when you apply for a home loan.
This can make a substantial difference to the home loan you might be offered. Knowing how a lender will assess your application and calculate what you can afford to borrow is the kind of information an experienced mortgage broker will know.
We work with brokers who are experts when it comes to arranging self-employed mortgages. Get in touch for a free, no-obligation chat to find out how much you might be able to borrow with two years of accounts.
Can I get a mortgage with only one years accounts?
It’s not impossible to get a mortgage when you’ve only been self-employed for a year and have only one year of accounts. You may need a bigger deposit and won’t necessarily have a choice of lenders but, if you can evidence some financial documentation to support your application, you could still find a competitive deal.
If you’ve been self-employed for less than a year you should be able to find a home loan for 80% of the property value, so will need at least 20% deposit.
Your application will be viewed in a stronger light if you have been in a similar line of work for a while. For example, if you’re a self-employed electrician, but were employed as an electrician for six years before setting up your own business, lenders will view you as less of a risk than someone entering a trade they have no previous employed experience in.
Past payslips evidencing your previous employment may help speed a home loan application up, and a reference from your previous boss may help boost a lender’s confidence when they are assessing your application.
If you have limited accounts because you’ve only been self-employed for a year, get in touch and we’ll connect you to one of the expert brokers we work with for a free, no-obligation chat. They’ll be happy to answer your questions and work with you to find a lender and a home loan to suit your circumstances.
What if I’ve been self-employed for less than a year?
If you’ve been self-employed for less than a year and have limited paperwork to support your application, it could be more of a challenge to find a lender. You’ll almost certainly need to put down a higher deposit than would be necessary with more financial records. This is because, without records, you may struggle to meet affordability criteria.
Low-doc home loans
Without access to all the relevant up-to-date tax returns at your disposal, you may want to consider a low-doc loan as an alternative way to achieve your goal. This would allow you to apply for a home loan using different documents to prove your income.
Lenders who offer low doc home loans will want to see other forms of financial evidence.
Depending on the lender and the kind of loan you are applying for, required paperwork could include:
- Evidence of ABN registration for 12 or 24 months
- Evidence of GST registration for 6 or 12 months
- A declaration of your financial position including one of the following:
- 6 months business bank statements
- 6 months Business Activity Statements (BAS).
- A letter from your accountant
Through a low doc loan with very little income verification you might find a lender willing to offer between 85% and 90% of the value of the property, although the rates on the loan are likely to be higher.
If you’re interested in whether you’d be better to wait or apply for a low doc loan now, speak to one of the expert mortgage brokers we work with. With an understanding of your current financial situation, they will be able to advise you of the kind of borrowing you may be able to consider now and how the situation could change over the coming months.
Get in touch for a free, no-obligation chat and we’ll match you with an expert in self-employed and low doc home loans.
Can I get a mortgage without accounts?
Sorry, no. When you apply for a mortgage and you’re self-employed, lenders will want to see evidence of your financial situation so that they can assess their risk. Without being able to determine how stable your income is, how can they be sure you’ll be able to afford to repay the loan you’re applying for?
Your best bet if you have no documentation is to either apply for a low doc loan which requires different kinds of paperwork to verify your financial status, or wait until you have the relevant documents to apply for a standard self-employed home loan.
Should you decide to wait there are a few other things you could be doing to help your home loan application go smoothly when the time comes, learn more in our mortgage advice tips.
Already have a really good-sized deposit? You may be able to find a more lenient lender by using an expert broker, like those we work with…
Speak to an expert
Securing a competitive mortgage deal when you’re self-employed can be tricky, but it needn’t be a total headache. Make light work of finding the best home loan for your specific financial situation by getting help from an expert mortgage broker.
We work with brokers experienced in helping self-employed borrowers secure home loans in all kinds of situations. Make an enquiry for a free, no-obligation chat and we’ll match you with a broker who has helped customers in similar circumstances.
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