While being self-employed has many great benefits … getting a mortgage might be a bit more tricky than usual. Having a Mortgage Adviser on your team to help you through the process is a great idea!
If you own your own business, the banks usually want to see:
- Two years of financial accounts from your accountant.
- Proof of how much money you’re making (your accountant can provide this).
- A clear picture of how stable your income is.
Are main banks the only option?
The main banks can have rigid lending criteria. This often makes it hard for people who are self-employed to get a mortgage from them. There are other options with non-bank lenders. They often have more flexible lending criteria that might be more suited to your situation. They assess applications on a case-by-case basis.
At Cole Murray, we have access to these specialist lenders, as well as the main banks. We can see what the best option for you is.
New in business
While two years of records is ideal, if you haven’t been in business that long, the banks may need more information. They want to understand your borrowing power. By providing evidence like business plans, contracts with clients or predictions of future earnings, they will be able to get a better understanding of your position. This is also where a non-bank lender could be an option.
Irregular income
Ebbs and flows of cash are common in small businesses, especially for freelancers or contractors. Having a regular income is not always an option when you own a business. In these cases, you may have to show a longer history to lenders. They will look at both your personal and business accounts when assessing whether they can give you a mortgage.
Tips for making your application more appealing to lenders:
- Create a realistic monthly budget that shows your personal expenses and those paid by your business. This includes things like your phone, vehicle and power.
- Be honest about your spending – it’s okay to include fun stuff like eating out!
- Engaging with a Mortgage Adviser so they can give you advice that is specific to your situation.
How we can help
Being self-employed absolutely shouldn’t stop you from getting a home loan. It just means you need to be a bit more organised with your paperwork. Come and speak to one of our Mortgage Advisers. They can answer your questions and give you advice based on your circumstances and get you a mortgage that suits you.
Photo by Vitaly Gariev.
