Self Employed and Chasing a Home Loan? Here Is How It Really Works

Here is the truth after two decades in banking and broking. Self employed does not mean unbankable. It means your income tells a story that needs to be presented properly. Most of the difficulty I see is not the borrower. It is the way the application was put together.

The picture is more flexible than most people expect, but lenders want to see a few things clearly.

1. Two years of tax returns and financial statements is the usual benchmark, though some lenders will accept a single year.
2. Consistency and trend. A stable or growing income reads far better than a one off spike.
3. Add backs. Depreciation, one off expenses, additional super contributions and interest on cleared debts can often be added back to lift your assessable income. Many applications leave this money on the table.
4. Clean, up to date BAS and tax lodgements.

Low doc, explained honestly

When your latest returns do not yet reflect how the business is really trading, a low doc loan can bridge the gap. It uses alternatives such as your BAS, an accountant’s declaration or business bank statements to evidence your income. It is a legitimate tool, not a loophole. The rate and deposit expectations differ, and it is not right for everyone. The job is knowing when it genuinely fits and when it does not.

The GYS approach

I sit down with you and your numbers before we go anywhere near a lender. We work out which lender reads your kind of income most generously, we structure the application so every allowable add back is captured, and we time the submission around your lodgements. Two lenders can look at the identical business and arrive at borrowing capacities tens of thousands of dollars apart. Choosing the right one is most of the work.

1. Applying to your own bank first, getting knocked back, and leaving a mark on your file before we even start.
2. Lodging returns that minimise tax right before a loan application, which can quietly halve your borrowing power.
3. Not planning the purchase around the business cycle, so the timing works against you.