A rising number of Australians are in the business world or becoming self-employed. This number was even heightened by the new normal brought by the 2020 pandemic. Self-employed always struggle when it comes to getting a home loan. This is primarily because of the difficulty in proving the “stability” of their employment. Most lenders don’t want to risk lending money self-employed if the records do not reflect long term positivity.
Essential Tips To Get The Best Home Loan
The nature of work in Australia has drastically changed over the last 20 years. Now, more than ever, we see more and more people working for themselves. Doing jobs in varied industries or working outside of the traditional 9-5 standard work hours.
Here are some tips that can help you get a home loan as a self-employed individual:
- Find the Best Offer
Look around for the best offer available. Contacting a mortgage broker (V Corp if you may) who is sure to find you the best loan offers available to you will save you time, efforts and can be the difference between paying more or less with every monthly repayment.
- Don’t Forget To Update Your Financial Information
Be responsible with your finances. Update your financial statements, income tax returns, and a notice of assessments regularly. Banks don’t usually accept financial statements that are not lodged with the Australian Taxation Office.
- Always Think Ahead
When deciding how much you need for your home loan, assess your financial needs. This will save you from having to re-structure or re-work your loan for the next three to five years.
- Protect Your Credit Rating
Credit history is essential when you want to get a home loan. It will help you get approved by lenders, plus having positive credit reporting will help you become even more transparent in the future. Whether you’re self-employed or not, a good credit score will always increase your chances of approval for a home loan. Lenders also run credit checks on your business whenever you apply, so make sure that your business credit score is healthy as well. If you have a bad credit score, you can improve it by paying all your unpaid debts on time.
- Provide Sufficient Documentation
As a self-employed individual applying for a home loan, your first objective is to prove your income to your lender by showing your lender your personal and business income tax returns (for a minimum of two years). Aside from your tax returns, also show your profit and loss statements. If you’re unsure how to do this, you can always ask a professional accountant or a mortgage broker to help you out. Looking to finance your home loan when you’re self-employed may be more challenging compared to being an employee with a consistent annual salary.=
- Show a list of your assets
Show a list of your assets – it could mean showing some of your investments like your stocks or rental properties. It could also mean showing your bank statements for your term deposits. The more assets you have, the more chances of loan approval.
- Become Well-Established
A new self-employed individual just starting their careers will make a less attractive option than self-employed individuals who have been in healthy business for a couple of years.
Meet V Corp
At V Corp, we specialise in providing financial solutions to self-employed entrepreneurs. Having helped secure over $250M in loans for self-employed, we deeply understand the challenges that come with a self-employed home loan application.
Whether you have rental properties, business equity, or other hidden investments that can reflect positively on your loan application, V Corp’s expert mortgage brokers have a knack for finding those assets!
Right from understanding your current financial scenario, giving you a unique home loan solution that meets your requirements, and even helping you prepare all the necessary proof and documentation. We make sure that you achieve the best loan outcome at the lowest interest rates. Contact V Corp, today!