A self emplyed woman looks at her notes to validate her income

Obtaining a home loan for a self-employed person can be difficult, with your application being heavily scrutinized and can seem like you jump through a lot of hoops.

Self-employed employed professionals applying for a home loan, may not always have the traditional income verification to provide lenders. If you haven’t got two years of lodged tax returns or are behind with lodging your returns or the income that is in your returns doesn’t reflect your current trading situation, then you may struggle to get a traditional home loan. But don't lose hope as there is an alternative solution.

Some lenders offer more specialised loans that are specifically designed to allow self-employed borrowers flexible options in demonstrating their income.

Following are the types of documents you will provide instead of tax returns. Usually they will require an income declaration along with one other document listed below.

Income declaration

If you qualify for a specialised self-employed loan, then you will complete an income declaration. It is usually around one page where you provide details of the loan amount, term and interest rate, your details including the nature of your business and then your estimate of your annual self employed income or annual net profit before tax. You then sign acknowledging that the lender will rely on your declaration and other documents you provide to assess your ability to meet the repayments on the loan.

Accountant’s declaration

If you are in frequent contact with your accountant and they are preparing your quarterly BAS returns and management accounts, they will be in a pretty good position to give their perspective on your current trading situation. An accountants declaration will include how long they have been your accountant, verify the amount of income you have declared and agreed that to the best of their knowledge that this amount is reasonable and accurate. They also acknowledge that they are not aware of any factors which will affect your ability to meet the repayments and the ability to make further comments about your financial position.

BAS Statements

Quarterly BAS statements can show your quarterly gross trading income as well as capital and non capital purchases. Lenders may require two to four BAS statements to help get a picture of your most recent trading history. With the knowledge of the type of business, an estimate can be made of what your net profit will be and this is compared to your income declaration.

BAS statements can be a great alternative if you are behind with lodging your tax returns or if the income in your returns do not accurately reflect your current trading situation.

Business Bank Statements

Similarly to BAS Statements, your business bank statements will help paint a picture of the income you are receiving and the expenses you are incurring. Typically a lender will want to see around 3 months bank statements to give them an indication of your trading situation.

Here at State Custodians, we understand self employed lending. Our Lending Specialists are here to find solutions and can advise you on own in-house self employed home loans as well as  from a broad range of lenders. We are online so no need to wait for appointments. You can ask questions and chat with us via phone, email or live chat at a time that suits you. Check out the Self Employed lending pages on our website (https://www.statecustodians.com.au/home-loans/promos/self-employed-home-loans) or give us a call on 13 72 62.

Here are the current home loan rates in the market

Lender

Variable
More details
LIMITED TIME OFFER
  • Fast turnaround times, can meet 30-day settlement
  • For purchase and refinance, min 20% deposit
  • No ongoing or monthly fees, add offset for 0.10%
LIMITED TIME OFFER

Smart Booster Home Loan Discounted Variable - 2yr (LVR < 80%)

  • Fast turnaround times, can meet 30-day settlement
  • For purchase and refinance, min 20% deposit
  • No ongoing or monthly fees, add offset for 0.10%
Variable
More details
FREE REDRAW FACILITY
  • No application fee
  • Unlimited additional repayments
  • Unlimited free redraw
  • Optional 100% offset can be added for $120 p.a.^
  • Application completely online
FREE REDRAW FACILITY
Variable
More details
100% FULL OFFSET ACCOUNTNO APPLICATION FEE OR ONGOING FEES
  • No upfront or ongoing fees
  • 100% full offset account
  • Extra repayments + redraw services
100% FULL OFFSET ACCOUNTNO APPLICATION FEE OR ONGOING FEES

Low Rate Home Loan - Prime (Principal and Interest) (Owner Occupied) (LVR < 60%)

  • No upfront or ongoing fees
  • 100% full offset account
  • Extra repayments + redraw services
Variable
More details
  • No upfront or ongoing fees
  • 100% full offset account
  • Extra repayments + redraw services
Variable
More details
NO UPFRONT OR ONGOING FEES
NO UPFRONT OR ONGOING FEES
Variable
More details
NO ONGOING FEES
NO ONGOING FEES
Variable
More details
UNLIMITED EXTRA REPAYMENTS
UNLIMITED EXTRA REPAYMENTS
Variable
More details
Variable
More details
Variable
More details
LIMITED TIME OFFER
  • Fast turnaround times, can meet 30-day settlement
  • No ongoing or monthly fees, add offset for 0.10%
  • Extra repayments + redraw services
LIMITED TIME OFFER

Smart Booster Home Loan Discounted Variable - 1yr

  • Fast turnaround times, can meet 30-day settlement
  • No ongoing or monthly fees, add offset for 0.10%
  • Extra repayments + redraw services
Variable
More details
  • Fast turnaround times, can meet 30-day settlement
  • No ongoing or monthly fees, add offset for 0.10%
  • Extra repayments + redraw services
Variable
More details
FREE REDRAW FACILITY
  • Fast turnaround times, can meet 30-day settlement
  • No ongoing or monthly fees, add offset for 0.10%
  • Extra repayments + redraw services
FREE REDRAW FACILITY
Variable
More details
  • Fast turnaround times, can meet 30-day settlement
  • No ongoing or monthly fees, add offset for 0.10%
  • Extra repayments + redraw services
Variable
More details
NO UPFRONT OR ONGOING FEES
NO UPFRONT OR ONGOING FEES
Variable
More details
Variable
More details
NO UPFRONT OR ONGOING FEES
NO UPFRONT OR ONGOING FEES
Variable
More details
Variable
More details
Variable
More details
Variable
More details
100% FULL OFFSET ACCOUNT
  • Reduce the amount of interest you pay by paying more
  • Easily access additional funds in your redraw
  • Fast turnaround times
100% FULL OFFSET ACCOUNT

Base criteria of: a $400,000 loan amount, variable, fixed, principal and interest (P&I) home loans with an LVR (loan-to-value) ratio of at least 80%. However, the ‘Compare Home Loans’ table allows for calculations to be made on variables as selected and input by the user. All products will list the LVR with the product and rate which are clearly published on the Product Provider’s web site. Monthly repayments, once the base criteria are altered by the user, will be based on the selected products’ advertised rates and determined by the loan amount, repayment type, loan term and LVR as input by the user/you. *The Comparison rate is based on a $150,000 loan over 25 years. Warning: this comparison rate is true only for this example and may not include all fees and charges. Different terms, fees or other loan amounts might result in a different comparison rate. Rates correct as of June 30, 2022.

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