Self-employed borrowers can do plenty to improve their chances of receiving a home loan by following some smart strategies.
Obtaining a home loan can be difficult for anyone, but the mountain can be particularly hard to climb for self-employed borrowers. It’s with this in mind that Australians who act as their own bosses should employ some time-tested strategies to help streamline the process.
Offset weaknesses
Mortgage lenders are adverse to risk, and a self-employed individual represents more risk than borrowers who can show proof of steady paychecks with a well-established employer. For this reason, it’s a good idea to offset your weaknesses by showing strength in other important areas.
For instance, credit is a great indicator of your past financial responsibility, so ensuring you have a good credit score and varied credit history can go a long way toward putting lenders at ease.
Financial assets such as property and savings accounts are also great additions to your cause, as these will show lenders that in the event that your working life stalls, you at least have financial assets available to help you stay up to date with your mortgage repayments.
Back it up
When you ask a lender to loan you money, you’re making the case that you can be trusted to pay it back. The best way to back this up is with documentation that shows you have a good track record. This could include things like tax documents, bank statements and any other valid paperwork that would make you appear more attractive as a borrower.
Explore all options
Unfortunately, supplying lenders with a mountain of paperwork isn’t always an option, but there are special mortgage available for self-employed individuals without the necessary financial documents required for traditional home loans.
Low doc home loans are a simple solution tailored to borrowers who have income and assets but are unable to produce necessary documentation at the time of application.
If you’re self employed and looking for home finance, you should speak to the specialists at Redrock to discuss your options.
