Being self-employed shouldn't prevent you from buying a home in Oakleigh or anywhere across Australia. While the application process for self-employed borrowers requires additional documentation, numerous Home Loan options remain available through banks and lenders nationwide.
Understanding Self-employed Home Loan Requirements
Self-employed borrowers face unique challenges when applying for a home loan. Lenders need to assess your financial situation differently compared to PAYG employees, as your income may fluctuate throughout the year. The key is demonstrating consistent income and strong financial management.
Most lenders require self-employed borrowers to provide:
• Two years of tax returns and notices of assessment
• Business Activity Statements (BAS) for the past 12 months
• Banks statements for both personal and business accounts
• Financial statements prepared by an accountant
• ABN registration details
• Professional references from your accountant
Determining Your Borrowing Capacity
Calculating your borrowing capacity as a self-employed individual involves averaging your income over two financial years. Lenders typically use your taxable income after deductions, which can sometimes work against self-employed borrowers who maximise their tax deductions.
Some lenders offer alternative assessment methods, including:
• Bank statement lending programs
• Low documentation loans
• Asset-based lending
• Alternative income verification methods
These options may help if your tax returns don't fully reflect your actual earning capacity.
Interest Rate Options and LVR Considerations
Self-employed borrowers can access both variable interest rate and fixed interest rate home loan products. Variable home loan rates fluctuate with market conditions, while a fixed interest rate home loan provides payment certainty for a set period.
When calculating home loan repayments, consider:
• Your loan to value ratio (LVR)
• Whether you'll need lenders mortgage insurance (LMI)
• Available interest rate discounts
• The loan amount you're seeking
Ready to get started?
Book a chat with a Mortgage Broker at OVM Finance Group today.
If your LVR exceeds 80%, you'll likely need to pay LMI, which protects the lender if you default on your loan. This additional cost should be factored into your overall budget when buying a home.
Exploring Home Loan Options
OVM Finance Group can help you access Home Loan options from banks and lenders across Australia. Different lenders have varying criteria for self-employed borrowers, and some are more accommodating than others.
Consider these loan features:
• Home Loans with offset account facilities to reduce interest payments
• Professional packages offering discounted home loan interest rates
• Split loan options combining fixed and variable components
• Redraw facilities for accessing home equity
The Application Process
The Home Loan application process for self-employed borrowers involves several stages. Start by gathering all required documentation before beginning your application.
Steps in applying for a home loan:
- Assess your financial position and determine your borrowing capacity
- Obtain Home Loan pre-approval to understand your budget
- Engage a mortgage broker to compare lenders
- Submit your complete application with supporting documents
- Await formal approval and settlement
Getting pre-approved provides clarity on your purchasing power and demonstrates to vendors that you're a serious buyer in today's property market.
Additional Costs to Consider
Beyond your loan amount and interest rate, factor in additional costs when buying a home:
• Stamp duty (varies by state and property value)
• Legal and conveyancing fees
• Building and pest inspections
• Loan establishment fees
• Ongoing loan maintenance costs
Working with Mortgage Professionals
A streamlined application process becomes more achievable when working with experienced mortgage brokers. They understand which lenders are most suitable for self-employed borrowers and can present your application in the most favourable light.
OVM Finance Group specialises in helping Oakleigh residents secure appropriate home loan solutions. Our team understands the local property market and maintains relationships with multiple lenders, increasing your chances of approval.
While being self-employed presents additional documentation requirements, it doesn't eliminate your ability to secure a home loan with competitive Home Loan Rates. With proper preparation and professional guidance, you can successfully obtain financing for your property purchase.
Call one of our team or book an appointment at a time that works for you to discuss your self-employed home loan requirements and explore the options available to you.