Self Employed Home Loans
Self Employed Home Loans may be easier to get than you think. Judging by some of the website pages that you may have seen come up in the search engine results pages, (if you are looking for self employed home loans in Adelaide, Australia), you could be forgiven for concluding that you will only be able to borrow a maximum of 80% against the value of the property in which you are interested.
As a self-employed person looking for a home or investment loan you could also be forgiven for thinking that you would have to pay costly Lender’s Mortgage Insurance (LMI) if you wish to borrow more than 60% of the property’s value, or that you will have to have been self-employed for a minimum of two years. You may also be convinced that as a self-employed person you are not entitled to Package Discounts on your home or investment loan that are readily available to Pay As You Go home loan applicants. Well, the good news is
“It Ain’t Necessarily So!”
(Apologies to George Gershwin).
The simple truth is that if you have been self-employed for at least 1 year and your tax returns show a taxable income that is sufficient to satisfy the lender’s “serviceability” (affordability in layman’s terms) calculator you should be able to obtain loan approval up to 97% of the property value, with one particular lender at the very least.
Your income or profitability will be calculated differently from lender to lender. For example, were you aware that some lenders will add back (to your bottom line profit) extra Super contributions, depreciation, interest payments, any unusual expenses such as one-off losses, net profit before tax, rental property expenses, Trust distributions and the fact that you have provided yourself with a company car? A company car alone can add back $5,000 to your income and as such will increase the amount you can borrow over say, 30 years at 5.29% principal and interest, by over $75,000.
You may have been advised that one lender may use the lower of the two income figures for the past two years. You may also have been advised that other lenders will take the average of the two years’ income or 120% of the lower year’s income. However, the good news is that another lender may use the most recent year’s income figure as shown on your tax return, even if it is several times higher than the first year. It is all about knowing who to approach.
Don’t make the mistake of approaching your bank and applying for a home loan yourself. Chances are, you won’t stand a chance of getting a loan simply because they apply different criteria to another lender who would welcome you with open arms. Why take the risk of trying yourself and leaving a big negative “Declined” footprint on your credit record when you could use my services for FREE? Call Vincent Woodall now on 0451 596 575. I am a “mobile” broker so I will gladly come to your place of work, or home, if you prefer that to coming to my office. Please remember, my service is FREE. The above assumes, of course, that your Tax returns are up to date. If not please go to the page dealing with Low Doc (Low Document) Home Loan applications.
Friendly warning 1
A credit assessor working for a bank or other lender will receive your home loan application to work on, and will be given the file containing all of your “supporting documents” that should prove that your application is worthy of approval. This will include your tax returns and they will check to first of all see not only that they are signed but also that they have been certified and backed up by notices of assessment from the ATO (Australian Tax Office). This is a simple fraud check to make sure that these are the same tax returns you lodged with the ATO.
Friendly warning 2
If you are borrowing in a company name, or a family trust or a business partnership, then an attempt may be made to pass your application on to business banking, as such applications are more complicated than they are for Pay as You Go applicants and the credit assessor may not feel confident in the task given to them or feel like going the extra mile required. You should refuse to accept this.
If you are offering a residential property as security then you should not then be expected to pay a higher rate of interest and also higher fees simply because you are borrowing in a business name. Your loan application may well be a business loan, however the risk to the lender, if approved, is not any higher than for a standard home loan as you will probably have to give personal guarantees. There are lenders who are fully prepared to fund such loans at normal interest rates so flatly refuse to pay a higher rate and take your business elsewhere.
You may then have to pay marginally higher fees so that the other bank or other lender can produce more extensive loan documentation which include a personal guarantee from the partners or directors, but this should be more than offset by the lower interest rate offered.
If you need help getting a home loan or assistance with any of the issues covered on this site, please call me, Vincent Woodall directly on 0451 596 575 or you can send me an email to email@example.com or alternatively please complete and submit the enquiry form below.
I am a mortgage broker in Adelaide and I am –
- Fully accredited by the Mortgage & Finance Association of Australia
- Fully qualified with the Diploma of Finance and Mortgage Broking Management
- Plus I have satisfied stringent financial and criminal record background checks.
Find a home loan with someone you can trust and who will ensure you’re getting the right home loan for you. Vincent Woodall. 0451 596 575 or alternatively send me an email to firstname.lastname@example.org .