Self-employed loans including self employed home loans and investment loans are what mortgages Mortgage Corp specialises in. In the following video, our Loan Strategist Neil Carstairs explains things that you need to consider when applying for a mortgage as a self employed property buyer. It also contains practical tips and advice on how to package your mortgage application in order to get the right outcome that you desire.
Full Doc Self Employed Loans
As Neil explained in the video above, if you’ve got all the necessary documents, eg: two years history of ABN, two years company profit and loss, two years tax returns etc, then to a lender, you’re similar any other mortgage applicants and should be able to access to a variety of lenders and loan products.
In addition, being self-employed, there are a lot of benefits: eg: you might be driving a company car that you possibly use for 80% business or you might have as equipment where we can look at things for adding back, which we call depreciation. And there’s interest. This is where it gets trickier.
We have a small business owner client who’s got an ABN and has been registered for two years. He has given us two years’ tax returns.
When we assess this client, we look at things such as
- How was his previous year?
- Was it good previous year compared to the most recent year? Was there any differences? Ws this year less or more?
- What are the reasons?
- He might have gone on a holiday, or he might have had some capital expenses, in one particular year that are once-off that we can look at as well.
- Which lenders will be more suitable for your particular situation
These are the things that we need to determine when helping our self-employed borrowers. Once we’ve assess your situation, based on your financials and goals, then we’ll identify the most suitable lender before packaging and presenting your mortgage application to the lender based on that their policies.
Read Self-Employed Loan Case studies here
Low Doc Self-Employed Loans
If you haven’t got any tax returns and all the other required documents, then a low doc loan may be your only option. And you may have to go to second-tier or a third-tier lender to apply for a low doc loans. And lenders will normally ask you to provide
- a BAS statement (a business activity statement), usually the last twelve months,
- a bank statement, again, usually the last six months.
- and/or an accountant’s letter.
Now, the accountant’s letter is generally done and the lender already has a format of what questions they need the accountant to answer.
Low Doc Loans V.S Full Doc Loans
The difference between a full-doc and a low-doc option generally comes down to choice of lenders, Loan To Value ratio (LVR), interest rates and fees.
|Full Doc Self Employed Loans||Low Doc Self Employed Loans|
|Choice of Lenders||Most lenders||Limited lenders|
|Security||Less deposit/equity required||More deposit/equity required|
As a full doc self employed loan applicant, you have access to all products from a bank and you generally have access to a lot more lenders. Whereas if you go low-doc, there’s only a few different lenders that specialise in low-doc lending. Whereas full-doc, a majority of the lenders have a policy or product that will suit most clients across the board so you can actually go and get the same product as someone, Joe Bloke, who gets paid every week gets a salary and a payslip,
As a full-doc applicant, you can potentially borrow up to 90%, 95%, not a problem. Whereas for low doc applicant, you’ll be looking at 60%, 70%, 80% loans and much higher interest rates, sometimes up to 2% more by being a low-doc versus being a full doc.
Higher fees for low doc loans. A lot of second-tier, third-tier lenders have higher fees, application fees, risk fees, valuations and legal which could apply to low doc loans.
And more deposit, more equity required, higher interest rate, so higher cost and set-up costs which are also going to be higher, which also add to the cost of purchasing a property.
But low doc loans are really suited to clients who’ve been able to save a lot of money and just haven’t been able to do their tax returns for the most recent years
Customise Loan Solution is The Key
Whether you’re a business owner, a self employed freelancer or contractor looking for a self-employed loan for your first purchase, investing, or for buying new equipment or a commercial property, the Mortgage Corp team will find the right loan for you and strategically package it for long term investment success.
Our lending partners include major banks and other non bank lenders, each of them have a variety of self employed loan products designed to suit different type of self employed investors and home buyers.
An experienced mortgage specialist who’s got the smarts will go in and bat for you to leave no stone unturned in preparing the most comprehensive and suitable loan application on your behalf. A loan strategy can be tailored for you with a comprehensive review of all areas of your business activity and goals, expert lending knowledge and a commitment to your future financial success.
Why Mortgage Corp?
Director Neil Carstairs, knows what it’s like to go out on a limb and start your own business, back yourself and be driven to provide an exceptional service.
We’ve built our award-winning business on the strength of our loans expertise and commitment to our clients. In just a short time, Mortgage Corp has become one of the most loved and trusted Mortgage Brokers in Melbourne.
As you would know, when people are happy with a service, they spread the word, and we’ve got hundreds of referrals and nothing but 5 star reviews from many happy clients.
What’s one of the keys to success for every business owner? Surround yourself with experts and people who know more than you in their field of speciality. We know loans. We know loan strategies, property investing, and the conditions, complexities, and opportunities of every loan product on the market. Here’s a summary of what we can do for you.
What you’ll get
- Detailed 360 degree assessment of your business and personal situation to determine your borrowing power. – You may be pleasantly surprised with the outcome.
- Access to loans from major banks and other non bank lenders on the market.
- Borrowing capacity up to 95% of the purchase price, including lenders mortgage insurance (LMI) depending on the lender and product.
- Self employed mortgage specialists with extensive industry experience and have deep understanding of lenders products and policies on self employed loans
- A loan structure that suits your self-employed situation and enables tax savings, improved cash flow and further property investment opportunities.
- Solid advice on how to structure your loans for long-term savings and investment success.
- Straight talk, real options, clear explanations and sound advice.
- The right loan to meet you and your business needs. It may not be a low-doc loan.
- Completion and submission of loan documentation by experienced mortgage specialists on your behalf.
- Flexible times and dates to meet, 7 days a week. We talk when you’re free.
- Keep you in the loop at every step, and explain what’s happening and why.
- Provide mortgage industry knowledge and options help you make informed decisions.
What You Need To Consider
- Have you been in business or have had your ABN for at least 2 years?
- Have your been making a profit each year?
- Have you paid yourself some wages and income in the last 1-2 years?
- Has you lodged a tax return in the last 1-2 years? How much tax have you been paying? The amount of tax you pay can determine your borrowing capacity, as the more income you make the mare tax you pay.
- Can you complete any outstanding tax returns soon before applying for a loan? Or do you need to? We will determine this for you.
- What type of financial documents can you provide? A tax return, Business Activity Statement (BAS), an accountant’s declaration?
- What are your business expenses that can be added back as a profit? (Add Backs such as depreciation, car allowances, excess superannuation payments, one-off expenses, rental property expenses)
- Will you need to purchase new equipment or resources for the business in the next few years?
- What are your business goals?
Mortgage Corp Process for Self Employed Loans
Step 1. Self Employed Preliminary Assessment Session – FREE
We’ll ask about your personal and company income, your assets and your liabilities to get as much financial information as possible so we can have a good understanding of your individual circumstance including your long-term goals and lifestyle, then we can get back to you with potential options.
Step 2. Self Employed-Loan Strategy Session- FREE
We’ll dig even deeper into your financial circumstances. After this meeting, we’ll gain a comprehensive understanding of how your assets, liabilities, and income fit into your financial goals.
Then we’ll customise a loan solution to help best serve you both now and in the future.
Step 3: Present lending options – FREE
After thorough research and analysis, we present you with your loan options. We ensure these options are designed to help you save on interest, fees and tax while maximising future property investment opportunities.
Step 4: Collect and document the required information for the application – FREE
When you are ready to proceed, we take the step to collect, collate and document all the required information relevant to your finance application.
Step 5: Loan application submitted by Mortgage Corp- FREE
When submitting your loan application, our aim is for a fast approval and we will do everything within our means to make this happen.
Step 6: Loan status updates – FREE
The mortgage concierge service team will keep you updated each step of the way so you’re never in the dark.
Step 7: Loan Settled- Congratulations – FREE
Step 8: Regular Loan Review & Updates – FREE
The Mortgage Corp team are committed to providing loan strategies and advice that we know will change people’s future for the better. We do things differently. We think laterally and long term for the best plan for you. We talk direct, and we’re passionate about property finance. Check out our Investor Blog for loan advice and insights.