I’m self-employed. How can I get a loan?

Q: What is the current lending environment for people with self-employed income?

It is no secret that it is much harder to get a loan and our income is far more critiqued being self employed compared with a wage/salary. With salary/wage, all you need is an employment contract, don’t even need to have started the job and they will use it at 100% value.

With self employed income, lenders may average your last 2 years which is very topical given the swings Covid and the last 2 ½ years have provided as it brings down how a business can be operating coming out of Covid. A good broker can help navigate this as each lender treats this slightly differently, but ultimately, it’s about the sustainability of income and the commentary around covering all the elements of it, where as employed peoples income is generally black and white. There are also non-bank lenders competitively priced who will loan with a business operating for only 1 year. Main banks can do this also case by case. Perception is very important as numbers can be perceived in several ways when it comes to self employed lending.

Q: What are some relevant key tips when applying for a home loan?

Account conduct is paramount. All lenders can see all your repayment history across everything, your bills, your accounts, all your regular payments. With the current environment lazy account conduct can break a very good application with strong income and equity. So please keep all your accounts in good order.

Don’t be scared of high or rising interest rates. As rates go up, prices come down and offset the increase. If your goal is to hold long term either you or the market will adjust itself to benefit. Buying in down market means when things flip, you will end up with capital gain and reducing rates. Double win.

Q: Why use a broker vs going direct?

Brokers know the market inside out and can put together packages such as using multi lenders to achieve things.

Won’t stop until we get a solution. Going direct to bank is yes or no, end of conversation.

Allowed to provide financial advice and structural lending support

Only need to provide information once. Again direct to bank, you get declined, you then have to fill in all paperwork again, we already have it and can rehouse the application if needed

How will you know what you’re getting is best for you if you only know or try one lender? A broker knows if there is a better alternative, but going direct, might think it’s a good outcome, but there are even better ones out there.

Speed of service. We are your partner and you have direct access to us at all times. No call centres for minor or major questions

Versatility, we can cover your whole lending environment, be it business, commercial, mortgage etc. using a range of lenders fit for purpose.