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Self employed

So you work for yourself? Every year more and more Australians just like you are choosing to sack their boss and go out on their own. So how does this affect you when it comes to taking out a home loan?

Being a self employed borrower sometimes changes things when it comes to taking out a mortgage. Whilst you can certainly gain access to all the same home loans as a PAYG or salaried person, it’s become very common for self employed borrowers to look at a Lo Doc (low documentation) home loan option. Why? Because let’s face it, being self employed often means complicated financials that may not always tell the full story.

Lo Doc Home Loans (Low documentation)
Generally Lo Doc home loans are available for those borrowers who are self-employed who are unable to provide full financial statements or taxation returns to verify their current income. Effectively, you can declare what your income is by completing an income declaration form. This offers flexibility if you’re self employed, especially if you’re borrowing money at a time of the financial year where you haven’t completed all your financial statements.

A Lo Doc Home Loan is ideal for those who are;

Self employed for at least 2 years
Financials not yet done
Financials not reflecting the full story
Short term self employed
A business showing fluctuating annual income

Pros and Cons of a Lo Doc home loan

P    With the minimal income documentation required, one of the perks of taking a Lo Doc loan is that the approval process is easier and therefore usually quicker!
C   Interest rates can be slightly higher than traditional loans.
P    Whilst interest rates can be higher, you usually have the option to transfer over to a traditional loan and therefore interest rate once you can provide traditional forms of income again.
C   There can be limits on the amount you can borrow for example you generally cannot borrow more than 80% of the property value.
P    Most Lo Doc loans have all the features of standard variable and fixed-rate home loans. This means options like a 100% mortgage offset account to enjoy interest saving benefits.

Why is my interest rate traditionally higher if I take a Lo Doc home loan?

Let’s face it, all decision making in life is about looking at the risk. If lenders are prepared to take a higher risk by lending you money without you providing your up-to-date financials, naturally they can charge a little extra depending on your situation.

Lo Doc Home Loan Purpose

Investment loan
Purchase owner occupier home
Refinance
Business cash flow
Home improvements
New vehicle
Construction Home Loan
Any other worthwhile purpose

Self Employed and looking for a Low Doc loan ?
Make an enquiry or apply online and find out how much you
can borrow!

Let’s take a look at a Lo Doc customer example;

Jeff the Electrician

Jeff had been working as an electrician for over 6 years. He decided he no longer wanted to work for a wage and was confident he could make more money and enjoy more freedom and flexibility by going out on his own, so about 1 year ago Jeff became self employed and business is booming! Jeff and his wife decide, now that they are earning more money, it’s time to move into a bigger home. Jeff and Megan head down to their local bank only to find they can’t get a traditional home loan because their business hasn’t been operating for long enough. They are so disappointed because they have already found and fallen in love with their dream home and don’t want to wait. This is where a Lo Doc loan is perfect and gives Jeff and Megan the ability to buy their new home straight away.

Pete the Florist

Pete has been operating his Florist business for over 5 years now. Recently he decided it was time to buy an investment property and start building a nest egg for his retirement. It’s now October and the bank wants to see all of Pete’s trading figures for the previous financial year. Most of Pete's paperwork is still scattered between several draws in his office and he hasn’t even thought about visiting the accountant yet, let alone preparing in depth figures the bank will want to see.

No Doc home loan (No documentation loan)
If you have good equity in your home or a large deposit (usually around 40%), it’s even possible to get a No Doc home loan which means absolutely no proof of income required at all! PLUS a No Doc loan has even more flexible features including less paperwork and a shorter term in business.

Assured Home Loan Products

Assured offers a wide range of home loans suited to self employed borrowers, whether you’re looking at a traditional loan, Lo Doc or No doc loan.

Interest Only Home Loan

Perfect for investors, an interest only mortgage will help you maximise the cash flow on your property.

Standard Variable Rate Home loan

A Standard Variable rate mortgage is traditionally the most popular type of home loan offering plenty of useful features and flexibility. The rate goes up and down depending on the market. A variable rate home loan can be linked to an offset account, helping to reduce your overall interest.

Standard fixed Rate Home Loan

Fixed rate mortgages are also popular with investors because they offer you the security of a fixed rate (which means set repayments) for a given period. This means you have the peace of mind when it comes to budgeting, knowing that your repayments aren’t going to change on you for the term you have selected. Fixed rates can range from 6 months to 10 years.

Basic Variable Rate Home Loan

A basic variable rate mortgage is simple to understand and easy to use and is ideal for borrowers who are looking to make minimum payments and require less flexibility than a standard variable rate loan.

Line of credit

A line of credit allows you to only pay interest on the money you actually utilise. These products allow you to utilise the equity in your property. You can use these funds for any personal purpose and like a credit card, any principal repaid is available to redraw.
This type of home loan is especially attractive to investors who need ready access to funds.

Low Doc loan

A Low Doc loan (low documentation) requires a declaration and BAS statement. They usually come with a higher interest rate. Assured offers a broad range of low doc loans, which are ideally suited to self-employed people unable to provide evidence of income.

Construction Home Loan

A great option for investing in property is to build. Assured Home Loans offers a range of construction home loans for investors. Construction loans are generally interest only for the building period, but then you are able to select from a variable rate, fixed rate home loan, line of credit and so on.

Low Doc loan

Assured makes applying for a home loan easy

See what others have to say about getting a home loan with Assured

"I would strongly recommend Assured as one of the better home loan providers and from experience, would consider their service to be superior than all the major banks.”

Brian, Marden, SA

Home Loan Calculators

Our handy Home Loan calculators can help guide you when deciding to purchase an investment property. These simple calculators generally require a small amount of information yet offer you some valuable results. Feel free to take a look at our full range of home loan calculators.

Congratulations on being a self employed borrower. To find out how much you can borrow, talk to one of our friendly consultants who can give you all the information you need.