Applying for a home loan when you're self-employed

Do you run your own business? It not always straightforward for business owners to get a home loan. You need to provide a range of documents like personal and business tax returns and assessments as evidence of your income. Lenders typically view self-employment as higher risk and many won’t lend to borrowers who have been working for themselves for less than two years.

But when you work with emoney, we can help you find a flexible home loan to suit your needs.

Our lending specialists are expert at cutting through red tape to find you a satisfactory result. If you can’t supply 2 years worth of financial documents then perhaps we can find you a suitable alternative or low documentation home loan. We have extensive experience in the area of non-conforming or specialist loans and have helped many self-employed borrowers successfully finance their new home.

Our top tips for self-employed borrowers​

Does your lender class you as self-employed?

Lenders have specific criteria around self-employment. The first thing you should check is that your lender actually considers you to be self-employed. Contractors or sub-contractors, for instance, may be classed as employees by some lenders.

Depreciation and expense add-backs

Don’t forget to include details of add-back expenses and depreciation which can be used to increase your assessable income and determine your borrowing capacity.​

Understand what is involved in your home loan assessment

When it comes to assessing self-employed income the methods used differ from lender to lender. Some lenders may asses you on the average of your last two years’ income, others the lower of the last 2 years’ while others may use a variance method. Your emoney lending specialist will be able to give you specific information when you apply for a home loan.​

Make sure your financials are up to date​

If you have been in business for more than two years, make sure you can provide financial statements, income tax returns and notices of assessment for the last 24 months. Typically, lenders will only accept financial statements that have been lodged with the ATO as evidence of income.​

Give an honest account of your income​

If you are applying for a low documentation loan the ATO may use your declaration of income to undertake a tax audit. Ensure the amount you declare is the amount you earn to avoid any tax issues down the line.​

Review your home loan​

Your financial needs will change. Monitor your cash flow and make sure your home loan is structured in a way that provides you with maximum flexibility.​

If you’d like to discuss your home loan options in greater deal, call our lending specialists on 13 SAVE (137 283).

How much can you borrow?

Use our borrowing calculator for an estimate of your borrowing capacity or contact one of our lending specialists to discuss your situation.

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