If you have done your Tax Returns and Financials and are showing good income for the last 2 years, the process and Interest rate will be the same as a normal Home Loan.

But Self-employed borrowers often come up against the challenge of not being able to present a raft of payslips and tax returns to back up their loan applications.  This need not stop you buying your dream home.

Many lenders offer low-doc or Alt-Doc loans for self-employed borrowers who can’t hand over Tax returns, Financials or haven’t been in Business for 2 Tax return periods. This means that, rather than the usual documentation, you prove your ability to service a loan using bank statements, GST BAS reports, and a declaration from your accountant.

Of course, as with any mortgage application, you must still prove that your income outstrips your spending and you can service the loan. Getting this right is more than presenting a lender with a few quick sums on the back of a napkin; it takes preparation.

Here are some quick tips to help get you that loan:

  • When applying for a new Home Loan reduce debt:

pay down credit cards and personal loans, and be sure to lower the credit limits as they are paid down, as lenders assess the total credit available to you as a potential debt level, not just the amount you owe.

If it’s a refinance we can look at consolidating these Debts into the home loan to increase serviceability

  • Speak to Money Buckets about how the structure of your business and your taxable income will impact your ability to borrow.
  • Do your taxes when you should, and always pay your tax assessments on time.
  • Save. Saving a deposit is obviously important, and showing your ability to live within your means and save is as well. This is key to serviceability – you want to show at least a six-month history of high income and low expenses.
  • Come to Money Buckets rather than a bank. Money Buckets has access to specialist lenders that assess applications on a case-by-case basis and tailor their products to self-employed borrowers and contractors, while bank lenders do not.

Low-doc loans do differ from standard loans in a few ways, apart from the application process. Lenders offset the extra risk they are taking by lending to a self-employed borrower or contractor by charging slightly higher interest rates and placing some extra rules on loan-to-value ratios (LVR) and insurance requirements.

Generally, you can expect an interest rate for a low-doc loan to be one to two percentage points higher than for a full-documentation loan.

Most lenders will also insist on an LVR of no more than 80 per cent – meaning that under no circumstances will they lend more than 80 per cent of the property value, as assessed by the lender.

In cases where the loan amount is for more than 60 per cent of the property’s value, some lenders also require self-employed borrowers to pay for lenders’ mortgage insurance.

But the Lenders are all super competitive at the moment so these restrictions may change.

Contact Us

Customer Enquiries: 1800 825 010

Admin Office: 0243696287


Post: PO Box 6100, Kincumber, NSW, 2251


Money Buckets ™ is a Trademark of Starlight Home Loans T/as Fast Debt Help

ABN: 94 145 613 056

Credit Lic 388809

Established 2010

MFAA membership 319292

Affiliates: Second Step Administration RDAA 1668

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