Top tips for getting a home loan when self-employed
- Posted in Getting Started
If you are a self-employed borrower or own a small business, you may already be familiar with the ongoing challenges of keeping your accounts, finances and income flow on track.
But getting a home loan doesn’t have to be another issue to worry about. Here are some steps that every self-employed borrower should take.
Know your numbers
When assessing a home loan application, lenders generally look for a consistent level of income that shows them you are able to pay your mortgage repayments. Establishing that you have been self-employed for a consistent amount of time will also work in your favour.
Pepper understands it’s sometimes challenging to provide all the paperwork necessary to document a borrower’s income. Pepper's alternative documentation (Alt Doc) process is designed to meet the unique needs of self-employed or small business owners who are unable to provide the income documentation required by traditional lenders and mortgage insurers.
A fast track to your goals
From the outset, it’s important to be upfront about what has been going on in your business. This is particularly important if there are any large fluctuations in the taxable income shown on your annual financial statements from one year to the next. At Pepper we have experience with a range of borrowers who are self-employed and we’re familiar with assessing the cash flow of small businesses.
Tackling the taxable-income dilemma
One of the major challenges self-employed people and small business owners face is their taxable income. The question to consider is how your financial statements will impact your borrowing options. Talking to a financial adviser or tax professional about your goals is an important step.
Smart cash flow
Making the most of your cash flow using a financial plan can be beneficial for people who are self-employed. Paying off any outstanding debts such as credit cards or personal loans will positively impact your cash flow, which may also mean you qualify for a higher loan amount with some lenders.
While these ideas can assist your loan application there are many options for self-employed people who are looking to get a home loan but have not yet been successful.
If you’re ready to take the next step in your home loan or investment property application, speak with a Lending Specialist at Pepper today on 13 73 77. We will look at your individual financial situation and try find a home loan product that fits your financial goals.