When you work for yourself, it can sometimes be challenging to meet the lending criteria to get a standard home loan. The good news is there are specialist loans on the market which are specially designed for self employed people and offer more flexible lending criteria. Some banks have made it easier for the self employed to apply for loans by providing a different set of documentation and lending requirements.
While the paperwork has been simplified in some ways, there is still essential information that is required by the lenders and this will differ between banks, products, policy, type of property you are purchasing and the amount you want to lend.
Self employed loans are sometimes referred to as a low-doc or alt-doc loan. There are several ways to provide evidence of income, which include some of the following;
- 12 months Business Activity Statements
- A letter from your accountant
- 6 months business bank account statements
While most self employed loans have a maximum loan amount of 80% of the value of the property, there are loans which offer up to 90%. The 90% loans can have some restrictions on the location and type of property. We discuss self employed loans in detail on our site.
Rates for self employed loans are often the same as for general loans. The rate will sometimes increase slightly for less evidence of income, where perhaps there is only one form of income evidence.
Using a broker will assist you in navigating through the many options available, as there are so many differing policies and criteria with each lender, it is challenging to know which will suit your situation – it can be extremely time consuming to undertake the research. IFCA has a lot of experience helping self employed people get the best home loan possible without you having to do all the legwork.