Are you self-employed and looking to obtain a loan?

Thursday 23 July, 2020

Being your own boss definitely comes with its perks – but those that are self-employed often find it hard to obtain a home loan (even with a steady income). Whether you’re looking to purchase a home or some equipment for your business, you may face challenges in the application process.

It’s important to know what will work for you and what lenders look for. Planning ahead for the application process will heighten your chances of being approved. Here are a few tips that may help you:

  • Know your numbers

Sit down and determine what repayments you can actually afford without stretching your budget. Applying for a loan that fits into your budget is sensible and the application process will be a lot easier.

  • Save up to offer a large deposit

We know what you’re thinking, ‘easier said than done!’. While it may delay your purchase, having a large deposit proves to your lender that you’re a low-risk client and sensible with your spending.

  • Work on your business and personal credit score

A high credit score will enhance your chances of obtaining a loan. Lenders will run a credit check on you and your business, so it’s important to ensure all outstanding debts are paid.

  • Be consistent with income and savings

When lenders assess your application, they will look for consistency of income. They want to see that business is steady and you’re maintaining a level of income that meets their minimum requirements.

  • Make sure you’re well established

If you haven’t been self-employed for long, you may find it difficult to provide enough documentation to be eligible for a loan. While it is still possible, it certainly is easier if you follow the above steps and ensure you’re well established.

If you’re looking to obtain a loan now, the sooner you can get your tax return done the better. The more information you can provide the better your chances are of securing a loan.

Each time you apply for a loan and you’re rejected, your credit score is affected – so getting your application right is crucial! Our team are highly experienced and can help guide you through your process and ensure your application goes to the right lender for your needs.

We'd love to assist you and your business!

You might also like...

Finance Brokers Tasmania selling a house Hobart

Preparing for Interest Rate Hikes!

When you consider a ‘hike’, what is the first thing that springs to mind? A walk through the bush or a sharp rise? The RBA lifted the official cash rate by 25 points to .35 percent last week – the first rise in 11 years. While we understand that a rate rise is never a good thing, interest rates are still at historic lows and we wonder if the use of the word ‘hike’ is a necessary one!

Finance Brokers Tasmania Lance Cure Gary Casboult

What is a SMSF?

Self-managed super funds (SMSF) are a different way of saving for retirement. A SMSF gives flexibility and control over where your retirement funds are invested, including the opportunity to invest in residential and commercial property.

Finance Brokers Tasmania - fixed interest rates

Government Grants - A budget Update 2022/23

If you missed the 2022-23 budget announcements this week, you may have missed the incentives announced for home buyers. While most are not new, the government have increased the number of spaces available for eligible home buyers through their Home Guarantee Scheme.

FBT Hobart Bec and Dini

Do you need pre-approval?

We are often asked if you need pre-approval before looking for your dream home. Pre-approval is not essential but it is one way to ensure you don't miss out!