Getting a home loan whilst being self employed is at times a gruelling task as many have experienced. At Mortgage Providers, we say ‘nothing is difficult as long as you know what you are doing’; hence we pride ourselves on our knowledge of loan policies and products for the self employed.
Criteria for self employed home loan
When taking up a self employed home loan, the first and most important criteria one needs to overcome is affordability or serviceability. If serviceability is demonstrated, then you will be able to afford your loan. Hence, using the lender’s calculation methodology, you will need to show that you can repay the loan without putting yourself under unnecessary hardship. A Mortgage Providers broker will assist with this calculation to help demonstrate your affordability.
Maximum LVR for self employed loan
Lending rules/policies for self employed
Different lenders apply various polices with respect to proving serviceability. Most lenders who consider self employed loans will ask for 2 years business and personal financials to show and prove their net business and personal income. With the 2 years financials, lenders will consider the overall net income for assessing the client’s business and personal income.
In most cases, lenders will take the 2 year average income in assessing the borrower’s affordability. A small number of lenders will look at the most recent financial year’s tax returns and take that income as the assessable taxable income in their assessment. These 2 methodologies can both have their pros and cons depending on your situation, and it’s best to speak to a Mortgage Providers broker to guide you through the best assessment approach to give you maximum benefit.
Low doc options for the self employed
Low doc loans were designed to assist the self employed to raise a home loan or commercial loan without the need for excessive financial detail as per 2 years financials. Low doc policy has changed considerably since the first low doc loans in 2000. In 2013, there are various low doc criteria that vary between lenders. The most common low doc policies are:
To get the best low doc solution, and find the loan which suits you, it’s best to speak to a Mortgage Providers broker on 1300 656 600.
Cash out for self employed home loan
When many self employed borrowers refinance their home loans, many are seeking either some cash out on top of their existing loan amount, and even reduce their interest rate. Getting cash out with a self employed home loan is possible to 90% LVR. The cash out purpose with a self employed loan can be for any of the following purposes:
- Purchase another property
- Purchase a business
- Finance equipment or other business assets
- Pay bills
Loan products permissible for a self employed loan
You can get any type of loan product with a self employed home loan in the residential product suites and commercial business suites. The loan types can be for any type of purpose either personal, investment or commercial.
The loan types can include any of the following:
- Standard variable
- Professional package
- Interest only loan
- Principle and Interest loan
- Fixed home loan
- Offset loan
- Line of credit loan
- LMI Waived loan
- Construction loan
- Commercial Loan
- Vacant land loan
- Bad credit loan
- Term loan
- Bank bill
- Overdraft facility
When you are self employed and are considering buying or refinancing, it’s best to speak to a Mortgage Providers broker. We will help you through the many policies and pitfalls you could fall into without the skills and knowledge that we have. We can make getting a self employed loan easy, so call us today on 1300 656 600.