Being self-employed has a host of advantages, but what you might not realise is that applying for a new home loan can be a lot more complicated than it is for other borrowers.
That's because lenders will require all sorts of extra assurances when offering self-employed home loans to be safe in the knowledge you'll be able to make the repayments.
However, if you have sound financials and all the documentation they want, there's no reason why you should find that your first home loan hasn't been accepted.
Documentation – and lots of it
The first item to check off your list before applying for self-employed home loans is that you have all the right documentation.
If you've been working for yourself for a while then this shouldn't be too hard to come by. Simply gather together your financial statements from the past few years.
This might not be quite so simple if you've recently become self-employed. Spend a couple of years building up your reports and you should find there's a much better chance of getting loan approval.
Proving your ability to make repayments
This is a standard requirement for any new home loan application, but it's even more pertinent if you're self-employed.
A lender will want to know you'll be able to make repayments on your loan without defaulting, which is where your solid financials will come into play.
You will need to supply all your bank statements and other financial information, so make sure it's up to the required standard before approaching a mortgage provider.
Bear in mind that lenders will be on the lookout for anything that might work against you, so make sure you have explanations for transactions when applying for self-employed home loans.
You can contact a Smartline Mortgage Adviser on 13 14 97 for home loan advice. Or complete our call request form and we'll call you!
DISCLAIMER: The information contained in this article is correct at the time of publishing and is subject to change. It is intended to be of a general nature only. It has been prepared without taking into account any person’s objectives, financial situation or needs. Before acting on this information, Smartline recommends that you consider whether it is appropriate for your circumstances. Smartline recommends that you seek independent legal, financial, and taxation advice before acting on any information in this article.