Self Employed Finance
Self-employed and need a Home Loan? Tax Returns not up to date or short on paperwork?
- Tax Returns not required to verify your Income .
- Letter from your Accountant would be sufficient to substantiate your Income.
- New Purchase, Refinance, Construction Loans, Cash Out.
- Credit Issues allowed, such as defaults, judgments, bankruptcy .
What does Self Employed Mean?
To be classified as self-employed, you may fit in one of the below categories:- Sole Trader
- Contractor / Consultant
- Freelancer
- Own your own business
- Partner in a partnership
What is a Low Doc loan?
A Low Doc (Low Documentation) loan is a loan suitable for self-employed people who are looking to buy a home or an investment property without the financial statements or tax returns usually required. Low Doc loans offer more flexibility to those who have income and assets but don’t have the traditional income evidence. If you have fluctuating income or your tax returns aren’t up to date, a Low Doc loan may be the best solution for you. Low Doc Home Loans are designed for self-employed Applicants who are unable to supply up to date Tax Returns to confirm their income. Instead, Borrowers can substantiate their income using a number of alternative methods which can include:- Supplying BAS Returns for the past 6 to 12 months. OR
- Supplying an Accountants Letter confirming income declared. OR
- Supplying an Accountants Letter confirming income declared.
You may be required to supply more than one of the above, as that varies by lender. As a guide, in order to obtain the most competitive rates its best you provide your last 12 months BAS returns. Your ABN should also be registered for GST, with an ideal period in excess of 12 months. However there are lenders that will accept 1 day GST registration.
What is the maximum amount I can borrow on a Low Doc loan?
It varies from lender to lender, but generally speaking the maximum you can borrow on a Low Doc loan is 80% of the property value. For loans up to 60% of the property value, there is no lender’s mortgage insurance (LMI). However, most lenders require LMI for loans between 60% to 80% of the property value.What's next?
If you want to know more about your options, contact us or fill in our Free Assessment Form.1300 227 663
Speak to a Specialist
Frequently Asked Questions
If I am self-employed, can I still qualify for a home loan?
Yes. We understand that if you are self-employed, you may not have the proof of income documents that are typically required when applying for a home loan. But this doesn’t mean you can’t get a loan. There are products designed specifically for self-employed borrowers to obtain finance, for example Low Doc loans. Speak to us today on 1300 227 663 and let us help you choose the right home loan with a Low Doc option.
What is a low doc loan?
A Low Doc Loan is an otherwise normal home or investment loan that does not require the normal income verification such as tax returns, financial statements or payslips.
Instead of providing these documents the lender will ask you to sign a form called an income declaration on which you state your income. The lender then uses your stated income in their assessment.
Are low doc loans only for self employed?
Yes, lenders will only accept self-employed borrowers for their low doc loans.
The reason why lenders only accept self employed borrowers is that there are legitimate reasons why they may not be able to prove their income, such as not having completed a recent tax return.
Whats the difference between low doc and a no doc loan?
In most cases, with a No Doc Loan you will not need to provide the full details of your assets and liabilities, nor will you have to declare your income!
Although there is variation between lenders, you will normally just sign a declaration confirming that you believe you can afford the indicative loan repayments.
No Doc lending is usually the domain of expensive private lenders that also do not care about your credit history. Rates for these private lenders can range from 2% to 6% per month, which is up to 72% p.a.!
However, there are one or two lenders that are “Prime” No Doc lenders, which will not charge a higher rate than their normal Low Doc Loans. These lenders will do a credit check, investigate the repayment history on your current loan and will usually not consider any defaults.
Typically the cheapest and best No Doc Lenders will lend up to 75% of the value of your property.
Do only non-bank lenders offer low doc loans?
Low docs loans are generally accepted by the majors. However you find there are large variations between lending policy and pricing between the majors and non-bank lenders.
Why should I use a mortgage broker for a low doc loan?
Because of the large variation between lenders it is essential that you talk to an expert to find the best deal for you.
There are also major differences between lenders in their LMI premiums, application fees and valuation fees that they will waive. This information is not published by lenders, but it is known by mortgage brokers.