How to find the Right Self-Employed Home Loan with the help of a Finance Broker?

You may have noticed that most self-employed individuals have to struggle a lot more with lenders/credit providers when applying for a home loan. But, it does not mean that all self-employed borrowers have to struggle with getting finance. It just means you might need the services of an expert finance broker on your side, who is a specialist at providing home loans for self-employed persons. Choose a finance broker who is willing to work on your behalf with the lenders/credit providers and who will help you in securing a home loan. Not to mention, he/she should also get you the right home loan that suits your needs and budget.

Why You Need Expert Advice?

Before you think it is impossible for self-employed borrowers to get a home loan, you need to sit down with an expert and professionally qualified finance broker, who will:

>> Establish what taxable income level you need to apply for a home loan

>> Establish your borrowing power (i.e. how much you can borrow), and

>> Determine your eligibility for a home loan

When assessing your eligibility for a home loan, the finance broker should be able to see if your business is maintaining a level of income that is suitable to meet the minimal "servicing" requirements.

Income Verification Requirements for Self-Employed Individuals

To confirm your income and qualify for self-employed home loans, lenders/credit providers will require from you:

>> Your most recent two years Personal Income Tax Returns

>> Your most recent two years Business Income Tax Returns, and

>> Your last two years Financial Statements (Detailed Profit and Loss Accounts and Balance Sheet)

What if I have been Self-Employed for under a Year?

Well, it is not impossible to get a home loan with your employment status; it just means the finance broker will have to work hard to secure your eligibility for a home loan. For example, you are now self-employed as a sub-contractor carpenter. But, you were employed in the same industry (i.e. line of work), and you worked for someone else for five years before you became a sub-contractor. You can still be considered for a home loan. Because, you are still working in the same industry and you are doing the same work. The only thing that has changed is the manner in which you are being paid.

Choosing the "Right" Home Loan

There are a wide range of home loans suited to you as a self-employed borrower. So, whether you are looking at a traditional or low doc home loan. Here, is a list of home loans suitable to you:

Interest Only home loan - This loan is perfect for investors who want to maximise the cash flow on their property.

Standard Variable Rate home loan - This is the most popular type of home loan as it offers you plenty of useful features and flexibility. You can link your variable rate home loan to an offset account, thereby helping you to reduce your overall interest.

Standard Fixed Rate home loan - This loan is popular with investors, as it offers you the security of a fixed rate. You will have the peace of mind knowing that your repayments will not change for the term of the loan you have selected and will also assist you when you are budgeting.

Basic Variable Rate home loan - This loan is ideal if you are looking to make minimum payments and you require less flexibility than with a standard variable rate home loan.

Line of Credit - This loan allows you to utilise the equity in your property, and you will only pay interest on the money you actually use.

Low Doc home loan - This loan also called a low documentation loan is ideally suited to self-employed borrowers who are unable to provide evidence of income. A Low Doc home loan requires an "Accountant's Declaration" form/certificate or BAS statements for the past 12 months and an ATO Lodgement Reference Number.

Construction home loan - This loan is a great option for investors wishing to build. Construction loans are normally interest only for the building period. But, after the construction period is over, you are then able to select from a variable rate, fixed rate or line of credit home loan.

Buying a home at any stage of life can be an overwhelming process in itself. Not to mention having to navigate through the options and to determine what mortgage suits your requirements. All of this can be a challenging and time-consuming task, so, having a finance broker on your side will save you lots of time and heartache.