Self Employed Borrowers

Self employed people often face different challenges when considering taking out a mortgage loan. At Perth Mortgage Brokers, we can help you navigate these difficulties so that you have access to as many borrowing options as possible. Different rules and regulations exist for the self-employed, as tax and financial records will also differ. 

Being self-employed does not mean you can’t borrow in the same way an employed person can, but the rules for accessing different types of home loans do set some different restrictions on you. By employing our service, you can leave those potential difficulties with us, and side-step the stress of the process at the same time.

Setting Conditions
For self employed people seeking a home loan, most lenders require you to have been self employed for two or three years – although there are exceptions. By having a history going back a few years, lenders feel more confident in assessing your finances, and predicting how your business will perform going forward. Up and down finances – even those that increase sharply – invite a lot of uneasiness and suspicion. Lenders typically want stable, dependable income, as sporadic growth and decline can seem perilous to them.

Still Starting Up or New to Self-Employment?
So, what happens if you’ve not been self employed for two or more years? The barriers are certainly a little higher for those without a more extensive self-employment history. Some lenders will consider people who have a year of self-employment under their belt, as there is still a proven financial track record. If you’ve been self-employed for less than a year, the difficulties are far more considerable. 

Most lenders will give you short shrift because there’s no evidence of what you can earn, although some lenders will look at the income from your last job and use that as a benchmark. This is done on the basis that you can always return to that kind of work if necessary. Our advisors will recommend the best way forward for you in these possible circumstances.

What Do Lenders Think?
It’s the belief of most lenders that self-employed people represent a higher risk than those employed by others. Their view is that income is less stable, less predictable, and that lending to self-employed people means they need to demand more thoroughly assessed applications from people. 

While it’s true that some self employed people suffer from more unstable finances, we understand that this isn’t the case for the majority of people. We’ll help set you up with lenders who offer more favourable conditions to the self-employed, so you needn’t worry about such prejudice.

Complex Finances
For many self-employed people, their finances are less straightforward than those of employed people. We have extensive experience in analysis of business finances, and we’ll ensure that any lenders you deal with accurately assess your information. If you skip using mortgage brokers like us, it’s possible that the lender you choose will misunderstand your finances, and you could receive unfavourable lending conditions as a result. By investing in our services, you make certain everything is 100% accurate.