HOME > BLOG > Home Loan Advice > Find the best self employed home loan

Self employed lending can be complex due to the differing lending requirements. But it is possible to find a competitive self employed home loan.

The loan and interest rate offered will depend on a number of things:

  • How long you have been self employed

  • What documents you are able to provide

Applications from self employed borrowers are scrutinised more heavily by lenders to ensure that the income is stable and consistent. The document requirements can be quite onerous, particularly compared to a PAYG borrower who only have to provide a few payslips.

Get your financial paperwork organised

Having your tax completed as close to the end of the financial year as possible can put you in a good position to prove your income to a lender. Self employed borrowers usually need to provide:

  • 2 years full tax returns & financial statements

    • Personal tax returns
    • Company tax returns
    • Partnership returns
    • Trust returns

  • Tax assessment notices

Lenders like to see a strong net profit figure that increases year on year. If you know you are in this position, you may qualify for most mainstream loans. These will come with flexible features and competitive interest rates.

What is a low doc home loan?

A low doc home loan sometimes called an alternative documentation loan, is the type of loan that can be approved without the normal income paperwork required for a standard home loan, such as tax returns and financial statements. The proof of income is done via different means. This enables self employed borrowers who qualify to be able to get a home loan.

Understand what you have going for you

You may not be in the enviable positon of the borrower above, but you know that you have the income to make repayments for a home loan. A low doc home loan may work for you if:

  • You have been in business for less than two years
  • You have fallen behind on your paperwork
  • Your tax returns are historical and don't represent your current trading situation

If any of these apply, then you may qualify to verify your income via other means.

Alternative ways to verify income

Generally you will estimate your income and then provide other documents to prove that this is reality.

  • BAS statements: They need to be lodged regularly and show sales for a quarter. Lenders can verify income using 2 to 4 BAS statements which should reflect your current trading situation.

  • Business bank statements: These will also show regular income flowing into your account which can be used to verify income.

  • Accountant's verification: Self employed borrowers often work closely with their accountant, so they may also be able to verify that the income declared is correct.

Search for a self employed specialist lender

The hardest part in finding the best self employed interest rate is finding a lender who has a number of loan options for self employed loans and can help you navigate the requirements in order to find the one that suits you. Comparison sites can have a listing for self employed home loans which they may refer to as low doc. Doing an internet search can also give you other options.

Quick Tip

Ideally the lender will have specialist options for self employed as well as competitive non self employed home loans. This way they will be able to ask the right questions to determine if you qualify for a standard loan with a really competitive rate. If not they should be able to take you through the steps to determine the loan product that would suit you and enable you to do what you want to do.

At State Custodians, we understand self employed lending. Our Lending Specialists are here to find solutions and help you navigate the requirements. Their job is to do the hard work for you, conveniently at a time that suits you. You can ask questions and chat with us via phone, email or live chat.

Check out the self-employed lending page on our website here, give us a call on 13 72 62 or leave your details here and we can contact you.