How you are being assessed is different from salaried workers. Banks use different methods to assess self-employed people, they will most likely look for your latest company and personal tax return, company financial report, and maybe notice of assessments rather than payslips and salary crediting records.
Choose the right type of loan
Whilst in some cases low doc home loans may suit you well, it is better off considering all options
available to get the loan most beneficial to you. If you have an established business with solid
consistent income, these will be sufficient to qualify you for a standard loan. Low doc loan normally
has a higher interest rate.
Tax returns and alternatives
Ideally, you will have your most recent two years’ tax returns lodged and these show solid
consistent income. Self-employed borrowers can get behind with tax returns and sometimes
haven’t been in business long enough to have two years’ worth. Alternative documents like an
accountant’s declaration, BAS statements and/or business bank statements can be used to back up
the level of income that you declare in your application. You would do a declaration about how
much you earn in a year and use these other documents to back it up.
Business has only been trading for a short time
If you purchased an established business or have moved from PAYG to contracting, then your cash
flow and profitability may be already at a level where you can borrow. Rather than assuming that
you have no options, it is worth exploring your options.
