Are you self-employed person and looking to buy a home? If so, you may be wondering how to maximize your chances of getting a home loan. While it may be a bit more challenging for self-employed borrowers to qualify for a mortgage, it’s not impossible. In this blog post, we’ll discuss some tips that can help you increase your chances of getting approved for a home loan.
Understand the Challenges of Getting a Mortgage as a Self-Employed Person
The first step to getting a mortgage as a self-employed person is to understand the challenges that you’ll face. Lenders will typically look at your tax returns and financial statements to determine your income and debt-to-income ratio. However, self-employed income can be more volatile than traditional PAYG income, which can make it more difficult to qualify for a loan.
Lenders often require more income documentation from self-employed borrowers, such as two years of tax returns, business bank statements and BAS returns.
How to Improve Your Chances of Getting Approved for a Mortgage
Despite the challenges, there are things that you can do to improve your chances of getting approved for a mortgage as a self-employed person. Here are a few tips:
- Get organized. Make sure that you have all of your financial documents in order, including your individual and company tax returns, business financial statements, bank statements and BAS statements
- Build your credit score. A good credit score will make you a more attractive borrower to lenders.
- Save for the deposit A larger deposit will make you a more attractive borrower.
- Work with a mortgage broker who specializes in self-employed borrowers. Brokers have experience working with self-employed borrowers and know which lenders will be best suited to your particular situation.
Conclusion:
Getting a mortgage as a self-employed person can be challenging, but it’s not impossible. By following the tips in this blog post, you can increase your chances of getting approved for a loan and achieving your dream of homeownership.
If you’re self-employed and interested in getting a mortgage, we invite you to book a time to chat. We’d be happy to help you work out what’s possible to get you on the right track to buying your dream home.