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Home Loan for Self Employed – What Do I Need To Know?

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If you are planning to buy a home and are self-employed, irrespective of how much you earn as a regular monthly income, getting a home loan will be a relatively difficult task when compared to salaried professionals earning similar incomes. To obtain a home loan you would be required to submit several documents like tax returns and letters of assessment etc. The added paperwork for home loans for a self-employed person makes the process more complicated than it would be for a salaried person.

When lenders assess the eligibility of a self-employed person for getting a home loan, more than income, they also need to ensure that the business is functioning steadily and generating revenues that meet the minimum service requirements. Providing documentation like tax returns and assessment letters from your accountant can take time, which means you would have to wait a while before you can apply.

However, all this does not mean that you are not eligible or cannot get a loan at all. There are certain requirements and formalities that people who are self-employed need to fulfill, which are somewhat different from those of a salaried person.

Hence, here are some things that a self-employed individual needs to know to get a home loan approved in lesser time even with lesser documents to submit.

Things You Should Know if Self-Employed

# 1 Apply for a Low-Doc Home Loan

If you are self-employed and feel that you might not be able to meet the full requirement of  documentation for your loan application, you may opt for a low-doc home loan. Like its name, a low-doc loan requires you to submit lesser paperwork than a traditional home loan application.

In this case too, different lenders will have different requirements, however the documents generally asked for are a duly signed Borrower Certificate of Income Declaration Form, Business Activity Statements (BAS), and tax returns. In certain cases, when applying for a low-doc home loan, lenders might even readily permit you to self-declare your business income and only check whether your Australian Business Number (ABN) or Australian Company Number (ACN) has been registered for more than two years.

Furthermore to ensure that the business is a profitable one, they will also check to see whether your business is registered for GST. To qualify for a low-doc home loan, you will need a larger deposit or higher amounts of equity.

# 2 Update your financial information

Being self-employed and applying for home loans will require you to keep your financial information updated and ready. Furthermore, you also need to check whether your financial statements from the last two years, like income tax returns and notice of assessments, are lodged with the Australian Taxation Office (ATO). The reason being that most lenders do not or rarely accept financial statements that have not been filed with the ATO and you do not want that to happen.

# 3 Check Your Credit History

Your credit history plays a major role in determining your eligibility for a home loan as a self-employed individual. This is especially true for small business owners, who need to protect their credit rating scores. A low credit score sparks a red alert among lenders and put you forward as unreliable and incapable of paying off the loan. Hence, it is important to get a bi-annual or quarterly report of your credit report so that you know where you are positioned in the present time and whether you are eligible for the loan.

Documents Required for Self-Employed Applicants

Below is a checklist of documents that you would be requiring to apply for a home loan as a self-employed applicant.

  • A completed and duly signed home loan application form
  • Your Australian Tax File Number (TFN)
  • Two proofs for verification of residence from any one of the following-
    • Rate notice
    • A legitimate driver’s licence with your photo on it
    • Any one utility bill like your phone bill or electricity bill
    • Your latest bank statement with your residence address mentioned on it
  • To verify your income you can provide any one of the following document
    • Balance sheet and Profit and Loss accounts for the last two years
    • Personal Tax Returns and Business Tax Returns for the last two years
  • Verification of rental income:
    • Copy of rental contract
    • Rental estimate for evaluation report
    • Bank statement evidencing payment of rent for last 3 months
    • Statements (min 3 months) from real estate agent showing monthly receipts
  • Records of your investments and shares
  • Contract of sale, including the special conditions page
  • Receipt of deposit paid for purchase of property
  • Plans,specification, builders quotation if any construction loans exist

Other than the following documents you also might have to provide your lender with identification that meets the government’s “100 points identification check” requirements. Below is a checklist of the documents required along side the points that they carry

  • Passport (70 points)
  • Birth certificate (70 points)
  • Citizenship certificate (70 points)
  • Legitimate driver’s licence or permit that has your photo or signature on it (40 points)
  • A Letter of introduction from another financial institution (40 points)
  • Credit cards or other bank cards(25 points)

Conclusion

Last but not the least, self-employed individuals must understand that their business should be at least 6 months old to be eligible for a home loan. Application and approval of a home loan is always a lengthy and tiring process, especially with all the paperwork involved. But, since getting your own home has been your lifelong dream, it does not mean you give up on it.

If you are not sure about how you can approach the situation and get things done faster, talk to a financial advisor and get things sorted out. You might be self-employed and have a lot of things running in your minds, but that does not mean you give up and let go. The aforementioned tips and advice will help you prepare for future plans leaving, thus saving you money and time in the process. Buying a home is not as complicated and you hear people say it is. Go ahead and give it a try.

Disclaimer:

The information presented by staff or employees of Credit Hub and its associated companies is provided for general informational purposes only. We do not guarantee the accuracy, completeness, or timeliness of the data or views presented. Audience members should conduct their own research and verify any information before relying on it. Credit Hub and its associated companies are not liable for any errors or omissions, or for any actions taken based on the information presented.

Mortgage Broker in Point Cook

Credit Hub Australia
About the role

Join our dynamic team at Credit Hub Australia as a Finance/Mortgage Broker in our conveniently located Point Cook office, close to the freeway and train station, with free parking available.

In this role, you will be responsible for providing personalised mortgage solutions to our valued clients and also managing your colleagues by co-ordinating the allocation of files and general day to day running of the broker team. With a focus on delivering exceptional customer service, you will guide clients through the entire mortgage process, from initial application to final approval.

“Position is for Mortgage broker on commission/contract basis.”

What you'll be doing
  • You will develop and expand network with our help.
  • Sales, cold calling, and networking come naturally to you. You thrive on engaging with prospective clients to understand their unique financial needs and goals.

  • You will act on leads and existing database as provided and generate sales and ongoing relations.

  • Actively participate in team meetings and contribute to the overall success of the business

What we're looking for
  • You are an existing broker with proven experience in Mortgage Broking or lending abilities, or in a similar financial services role looking to take your career further with a successful Mortgage house.

  • In-depth knowledge of the Australian mortgage market, including products, policies, and regulatory requirements.

  • Excellent communication and interpersonal skills, with the ability to build lasting relationships and earn client trust.

  • A strong commitment to delivering outstanding customer service and consistently exceeding client expectations.

  • Self-motivated and capable of working independently, while also thriving in a collaborative team environment.

  • Relevant industry qualifications, such as a Certificate IV in Finance and Mortgage Broking.

  • Ability to manage multiple tasks, stay organized, and work reliably without supervision.

  • A results-driven mindset with a strong sales focus, coupled with exceptional work ethic, time management, and multitasking abilities.

What we offer

At Credit Hub Australia, we are committed to providing our team with a supportive and rewarding work environment. Some of the key benefits of joining our team include:

  • Competitive remuneration and performance-based bonuses
  • Ongoing training and professional development opportunities
  • Flexible work arrangements and a positive work-life balance
About us

Credit Hub Australia is a leading provider of mortgage and finance solutions, with a strong presence in the Point Cook in the Western Suburb of Melbourne and surrounding areas. Our mission is to empower our clients to achieve their financial goals by delivering personalised, expert advice and exceptional customer service. We are a dynamic and growing team, driven by a passion for helping our clients and making a positive impact on our local community. We are with Finsure as an agrregator Group. 

If you’re ready to take the next step in your career as a Mortgage Broker, apply now to join our team at Credit Hub Australia.

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