Being self-employed comes with so many benefits. You are given the freedom to pursue your dreams and work for yourself, with no one else to answer to. You can set your own hours, you can work around your family and so much more.
Of course, it does come with some drawbacks due to the fact you don’t have a dependable paycheck and generally living from week to week. One of those setbacks comes in the form of being able to take out a home loan. Can self-employed get home loans?
Can Self-Employed Get Home Loans?
Being self-employed does throw a spanner in the works when it comes time to apply for a home loan, but there are plenty of options available to you. It’s about doing your research and making sure you are aware of your choices. If you are wondering can self-employed get home loans? The simple answer is yes.
Many people mistakenly think that being self-employed limits your options considerably, and you have to look at low-doc loans from a variety of different lenders with higher interest rates. While this is one option available to you, it isn’t the only one.
Many lenders will push low doc loans on you for the following reasons:
- They can charge a higher interest rate which makes it more beneficial for them.
- It’s cheaper for banks to process than a home loan.
- Many lenders don’t understand what it means to run your own business and automatically assume it is too risky for more traditional home loans.
When it comes to answering, can self-employed get home loans? It’s important to understand that at the end of the day, the only thing that matters is whether or not you can afford the repayments. If you live paycheck to paycheck and don’t know when the next one is coming in, then taking out a mortgage probably isn’t a great option for you. On the other hand, if you have regular money coming in that you can rely on then there is no reason not to take out a mortgage with a competitive interest rate.
Can Self-Employed Get Home Loans? How?
Can self-employed get home loans? Yes, they can, and here’s how to go about it.
- Look for the best offer. Ignore the fact that you are self-employed and have a look at the best offers on the market. Shopping around and knowing your worth is the first important step when it comes to taking out a home loan
- Get documents in order: take a look at your financial position, work out what you can afford in repayments and get all the right documents in order. This can include bank statements, that show regular income coming in, along with tax returns and notice of assessments.
- Look at your business add-backs: these can increase the amount the lender might loan you. These can include a car allowance, excess super contributions, non-cash expenses and so on.
- Credit history: it is important to take your credit history into consideration. The higher your credit score, the more chance you will have of taking out a loan that works for you. If you have a good borrowing history and a steady income, these will both work in your favour when it comes time to apply for a loan.
- Future income: project into the future and take a look at where you see your business in the next 5 years. Is there any reason you may not still be receiving a steady income? Could this increase? This can all factor into your loan.
Many self-employed choose to steer clear of a home loan altogether or take the first one offered to them. There is a misconception that being self-employed makes you more of a risk to the lender. In fact, this isn’t the case at all and it will always depend on your individual circumstance. If you feel lost when looking to take out a home loan, then be sure to speak to the experts and make sure you are getting the best deal possible.
Taking Our A Self-Employed home loan
Now that we have answered: can self-employed get home loans? You might be looking at the best option for your circumstances. It’s important not to get sucked into the first deal you come across. Being self-employed shouldn’t mean you have to make sacrifices when it comes to taking out a loan. In fact, your income may be more certain than that in a full-time job. Instead, do your research and find the best solution to suit your needs.
The expert team at NSW Mortgage Corp can help you out. We specialise in helping people right across Australia identify the best home loan for their situation. With access to a huge panel of lenders, NSW Mortgage Corp can save you hours of research, along with plenty of money, by helping to find the best rates. Pick up the phone and give us a call today.