Tailored Mortgage Brokers for Self Employed Home Loan Solutions!
Are you in search of the best home loans for self employed? Greetings from Bloom Home Loans, your dedicated & trusted mortgage broker for self employed individuals. We have knowledge of the unique difficulties experienced by freelancers, small business owners, and entrepreneurs. Our goal is to help people in Australia to realise their dream of becoming homeowners, with solutions that are specifically designed to meet your needs.
Obtaining the best home loans for self employed in Australia can often seem like navigating a maze of requirements and paperwork. This is the exact area in which Bloom Home Loans specialises. By utilising our knowledge and dedication, we simplify the process and offer direction at every turn to ensure a smooth and successful journey.
Our team of experienced mortgage brokers for self employed is committed to finding the best home loan solution that suits your specific needs and financial goals.
How Long Do I Need To Be Self-employed To Qualify For A Home Loan?
The process of securing a home loan for self employed individuals, freelancers or business owners, will require crucial consistency in Maintaining. Most of the lenders will necessarily ask for proof of self employment for at least two to three years. At Bloom Home Loans, we are aware of the unique features of each circumstance. Because of this, our trusted team collaborates with an extensive network of lenders who value the entrepreneurial spirit and are open to considering applicants with just one year of self-employment history.
What if I’ve Been Self-Employed for Less Than a Year?
If you’ve been self-employed for less than one year, your options are more limited. Most lenders may not consider an application because you don’t yet have tax returns to prove your income, and because new businesses have more financial uncertainty.
We have lenders who can look at your income from your last job and take that as proof that you can afford the loan.
The reasoning behind this is that if you decided to close your business, you could always return to working for someone else on a similar salary. On that basis, we can help you borrow up to 80% of the property value. As the best mortgage broker for self employed individuals, we ensure tailored solutions to fit your unique circumstances.
What If I’ve been Self-Employed For One To Two Years?
We are accredited with some lenders who can approve home loans for self employed people between one and two years as long as they have been in the same line of work for some time and have at least one year’s financials for the new business.
A good example of someone we can help would be an Electrician with their own business, who has been operating for one year, who was previously employed as an Electrician for five years.
What Mistakes Do Banks Often Make For Self Employed Loans?
We often see mistakes in the way that the banks calculate the income for self-employed home loan borrowers.
For complex loans, we make extensive notes, and if need be, call the assessor and walk them through the financials to ensure that they assess the loan correctly.
The most common mistakes we see are:
Lack of understanding: Complex trust structures with multiple companies and trusts are often handled by bank staff who lack the experience to understand what’s happening with your income or if you’re using income protection payments. In these cases, we’d talk to your accountant and then speak to the assessor to ensure they understand exactly what’s going on.
Double-dipping: This is where the lender takes an income into account twice (e.g. Net Profit before Tax and accepts the dividend paid to a director) or takes an expense into account twice (e.g. forgetting to add back interest on loans).
Company car: Lenders frequently overlook the advantage that self-employed individuals gain from deducting their car expenses through their business. We consistently highlight this factor in our documentation as your trusted self employed mortgage broker.
Procrastination: Technically, this isn’t an error as it’s done on purpose! If your loan is particularly complicated, we find that bank staff may take their time to get your application. We usually speak to management and ask them to assign your loan to an experienced assessor who will enjoy the challenge of a complicated application.
How Do Lenders Calculate My Income?
Most lenders believe that by looking at your past tax returns, they can predict how stable your business will be in the future.
Banks and non-bank lenders alike 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 or take 120% of the lowest year’s income.
- They may or may not then add back expenses shown on your returns.
- Some lenders accept your six month’s payslips and a letter from your accountant instead of providing tax returns and financials.
As you can imagine, this makes a big difference to your loan application! Importantly, every lender will interpret your tax returns differently and may look at your skills as an entrepreneur, your experience in the industry and the risk profile of your industry to determine how to assess your income.
Get In Touch With The Best Mortgage
Brokers for Self Employed Home Loans
Don’t let the complexities of self employment get in the way of your goal of becoming a homeowner. You can rely on Bloom Home Loans to get support through the process of obtaining self-employed home loans & we can assist you in fulfilling your dream of becoming a homeowner.
Depending on your situation, we may pick and choose which information to provide to help prove the highest possible income. If you can provide them, then we may ask for Business Activity Statements (BAS), An Australian Taxation Office (ATO) tax portal printout or bank account statements for the last three to six months showing your turnover.
We specialise in finding the lender that will look at your documents most favourably!
How We Are Paid
There is no cost to consult a professional mortgage broker for self-employed clients. The lender pays the broker a commission for introducing clients to their services.
Credit Scoring
Applying for finance is an important decision. Every credit application stays on your credit file for five years. Making multiple applications in a short time can damage your credit score and make it harder to obtain finance.
We are close!
Bloom Home Loans is your trusted advocate, specialising in home loans for the self-employed. We’re here to find the right loan for you. As locals who know the area well, we’re committed to providing personalised support.
FAQ
- Expertise Beyond Paperwork: We specialise in securing approvals, not just processing paperwork.
- Dedicated Support: We provide dedicated assistance to ensure your application progresses more swiftly than many others in the industry.
- Best Interest Duty: Bloom Home Loans operates under a best interest duty, which banks do not.
- Nationwide Service: We offer services across Australia.
- Ethical Practices: As a full member of MFAA and AFCA, we adhere to the most ethical and finely-tuned lending practices.
To put it simply, the lender’s maximum loan is normally between 5 – 7 times gross income. It is always important to consider what is the best way to present your income to a lender so that they will understand? Items such as personal loans, credit cards and HECS debt all have a very large impact on how much you can borrow. Depending upon your income some lenders are very strict on overtime, bonuses, commissions and self employed. Whereas others are far more lenient in these areas. We are experts in understanding each element which may affect your ability in obtaining credit.
Absolutely! We pride ourselves in knowing lender policies for our self employed clients. Some
lenders will offer prime rates will an ABN as little as 6 months old. Understanding your business and
then representing this in the right way to the right lender is very important. A good Accountant will
ensure you have tax effective income. A good Mortgage Broker will understand the good work your
accountant has done and then represent this to the bank in the right way to increase your borrowing
power.
Many years ago lenders needed you to have at least 20% deposit plus stamp duty to buy a home. As
living costs and home prices increased; they released this was an unrealistic hurdle. So they allowed
clients to have as little as 2% deposit but pay a one off insurance premium – Lenders Mortgage
Insurance (LMI). LMI protects the lender in the event you default on the loan but you pay the
premium. LMI is normally added to the home loan. Whilst it can be a significant cost, it enables you
to get into the market sooner
All lenders use independent third party valuers to assess the value if your home when a full on site
inspection is required. Normally this cost is picked up by the lender. Some lenders have their own
software to automatically determine the value of your home. Valuations between lenders vary
significantly. Sometimes more than 20%. If a valuation is required we will order this for you.
Rather than count yourself out of being able to get finance we recommend you contact us as you may be surprised what is possible. There are specialist lenders we have relationships with that will consider your loan application even with bad credit, defaults, ATO debt and bankruptcies.
Lenders look at your Capacity to repay the loan, your Capital / how much money you have, Collateral you are offering as security for the loan, Conditions including the economic environment, loan purpose and interest and your Character to ensure you are a responsible borrower and will repay the loan
Fixed rates are great if you are worried about what would happen when interest rates rise. Theyoffer certainty for a period of time but this certainty may come at a cost with higher interest rates. You will likely also be restricted from making additional repayments off your loan.
Variable rates enable you to pay as much off your home as you like without penalty. You can also access these payments again via redraw if you are ahead on your scheduled payments. If rates fall you will benefit whereas If they rise your loan payments will increase. It is possible to have a split loan, where a portion is Fixed and a portion Variable.
The best loan is the one that offers certainty of approval and meets your needs now and into the future. The lowest rate may not necessarily be the best fit. Whilst a low rate may be enticing now, if the bank policies mean you cannot access it or if the loan structure is not suitable then this may not be the best option for you
Yes. This is sometimes called “the bank of mum & dad”. Loans with no deposit may be possible if another property is offered as partial security to support the loan. It may not increase the amount you can borrow but it will reduce the risk to the lender and result in a lower interest rate. It will also save you having to pay Lenders Mortgage Insurance. It is not without risk though. The guarantors property is used to secure your loan If you default on your loan the bank may call upon the guarantor to pay the shortfall. Guarantor loans of this nature are limited but still present a risk.
If the loan term exceeds your expected working life the lender will want to know how you will pay the loan when you finish working. This is termed an exit strategy. There are various exit strategies that are considered by lenders. Some include downsizing to a smaller property after retirement, using superannuation to pay off the remaining loan or if it is an investment property you can sell it at any time
We save you time by preparing the loan application and presenting you to the most suitable lender in the best manner, request interest rate reductions on your loan, structure the loan, offer guidance on the benefit of making additional loan repayments and saving you time. When we say our home loans don’t cost the Earth, we mean it. Even a 0.50% interest difference on a $500,000 loan over 30
years will save you more than $55,000
Every lender is different. For our first meeting we recommend getting evidence of income, liabilities and ID. We will guide you on the specific requirements as we progress your application
We will make this clear once an application is lodged. Approval timeframes vary depending on the lender and complexity of your application. We monitor your application every day to ensure it never falls behind as we have seen is all too common in the industry.
We encourage you to reach out at any time! We have a passionate team ready to discuss your needs right away.
How do I start?
We encourage you to reach out at any time! We have a passionate mortgage broker team
ready to discuss your self employed loan needs right away.
Home Loans
Buy a property