I am a self-employed tradesperson running my own small business. Is it possible for me to get a home loan?
- Tradie
Hi Tradie,
We understand fully that it is not always easy for a self-employed small business owner to obtain a conventional home loan. We also appreciate that this situation is further complicated by the vast amount of financial information you are required to provide to a lender/credit provider. To help you get a home loan, specialised lenders/credit providers have developed a loan package called "Low Doc" home loans (also known throughout the finance industry as “Low Documentation" loans).
If you are a self-employed business owner like Tradie or you do not have adequate financial documents for any reason, you can apply for low doc home finance and buy your dream home. Before you apply for the loan program, understand everything about the loan package. It will help you in choosing the best financial solution.
Suitability
Low doc home loans have allowed thousands of Australians who, for various reasons, have been rejected by mainstream lenders/credit providers, to access a home loan.
A low doc home loan is specifically suitable for people who have assets as well as income, but cannot provide a financial statement or tax return as documented evidence of income, for example:
• Self-employed people who may only pay themselves a standard wage and run their business in a way that means they fall into a lower tax bracket to avoid income tax
• Property investors who may have varied income from month to month and from year to year
• Contractors and seasoned workers who don't work regular jobs, and
• New Australians families who have just moved to Australia and may not have pay slips or tax returns from the work they have been doing since they arrived in Australia
Income Verification Process
A low doc home loan enables you to self-certify your income, where you state your income (i.e. what you make) on the "Declaration" document. And, the lender/credit provider will not verify your income by using masses of documentation otherwise required, such as, tax returns, BAS statements and more.
Restrictions
The conditions for low doc home loans are more restrictive than standard residential home loans as they provide a higher level of risk to the lender/credit provider, for example:
• You cannot borrow more than 80% of the value of the security property, and
• Any Low Doc home loan with a Loan-to-Value Ratio (LVR) higher than 60% will incur a Lenders Mortgage Insurance (LMI) premium
What Factors Determine the Interest Rate for Low Doc Home Loans?
Some of the factors that lenders/credit providers consider in determining the interest rates include:
• At least 20% deposit (i.e. you do not have to show evidence of savings)
• Nature of and the security property type
• Client credit history
• Loan size amount
• Aggregate of total exposure to the lender / credit provider
• If self-employed, the period the client has been in business
• Age of borrowers, and
• The purpose of seeking finance
Why Choose Singh Finance?
As with any financial decision you have to make, take advantage of our professionally qualified finance brokers who have a thorough knowledge of the credit policies and standard requirements for low doc home loans. As they liaise with the specialised lenders/credit providers on a regular daily basis, our finance experts will save your valuable time trying to source the right low doc home loan and will arrange a pre-approval for you.
Singh Finance is a reputed finance brokerage firm in Australia. The firm has a team of expert and professionally qualified finance brokers who will leave no stone unturned in obtaining a low deposit home loan for you. The team will even help you in finding suitable non-conforming home loans for people with bad credit. So, don’t worry if you have discharged bankruptcy or default credit. Call on 0424 190 908 today.
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