Self-employed borrowers come up against many challenges.
Not being able to simply present payslips and tax returns to back up their loan applications doesn’t stop you from getting a better or buying property.
How are self-employed loans different?
Many lenders offer loans for self-employed borrowers who can’t hand over payslips and employment records. This means that, rather than the usual documentation, you prove your ability to service a loan using bank statements, declarations from your accountant and financial records.
Of course, as with any mortgage application, you must still prove that your income outstrips your spending and you can service the loan. Getting this right is more than presenting a lender with a few quick sums, it takes solid preparation to get it right.
Loans to the self-employed do differ from standard loans in a few ways, apart from the application process. Lenders offset the extra risk they are taking when lending to a self-employed borrower or contractor by charging slightly higher interest rates and placing some extra rules on loan-to-value ratios (LVR) and insurance requirements.
Most lenders will also insist on an LVR of no more than 80 per cent – meaning that under no circumstances will they lend more than 80 per cent of the property value, as assessed by the lender. In cases where the loan amount is for more than 60 per cent of the property’s value, some lenders also require self-employed borrowers to pay for lenders’ mortgage insurance.
How we can help you
At Craig Tracey Lending we take time to listen and understand you then we compare all the loan products in the market for you. And then we use our experience to go a few steps further to help you make the right decision.
We give you all the information you need in simple language that is easy to understand – we call it your “Borrowing Plan”. Your borrowing plan is personalised to your specific needs and shows you how to save thousands of dollars in interest, fees and charges over the life of your loan.
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