Banks just love to make it hard for anyone with a business to borrow money. They want tax returns, ATO notices of assessments and then letters from your accountant, making applying for a home loan incredibly difficult. Luckily not every bank needs the same requirements for the self-employed.
The majority of lenders require you to be self-employed for at least two years, however some banks can consider people who have been self-employed for only one year. Banks and non-bank lenders tend to be very wary if you have an income that has increased or decreased by a large amount in the last two years.One lender may use the lowest of the income figures for the last two years.Another may use the most recent year’s income as shown on your tax return.Some may even average the two years income and this makes a big difference to your loan application and how much you can borrow.
Every lender will interpret your tax returns in a different way and may look at your skills, your experience in the industry and the risk profile of your industry to determine how to assess your income. Depending on your situation, we may evaluate which information to provide to help prove the highest possible income to help approve your home loan application. The lender will also need your lodged tax returns, in some cases your Business Activity Statements (BAS) and bank account statements for the last three to six months showing your turnover.
We find the best solutions for you by finding the lender that will look at your documentation in the most favorable way.
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