Getting approved for a home loan as a sole trader can be far more complex than if you were on a salary. Lenders have different policies, documentation requirements and offers available for sole traders and self-employed borrowers.
As a specialist in sole trader home loans, our expert mortgage brokers will make your finance approval process stress-free. Read on to find out everything you need to know about applying for a home loan as a sole trader.
Properly assessing and packaging a sole trader application requires specialist finance knowledge and expertise. Analysing tax returns, understanding addbacks, company liabilities and making sure you meet lender policy are all a critical part of any sole trader home loan application. Simplifi Lending are experts in the policies available to sole traders across our large lender panel of over 35 lenders.
Don’t risk trusting your application to someone who doesn’t understand these policies and getting declined- we will make getting your home loan approved simple.
If you’re a sole trader looking to buy your first home, this is the loan type for you. There may be negotiated interest rates, low deposit options and even First Home Buying schemes and incentives you can access. For more information specific to buying your first home, check out our First Home Buying page.
Already have a home loan with another lender and want to review your interest rate, consolidate debt or access additional funds to renovate? Our expert mortgage brokers can help you refinance your home loan as a sole trader. For more information on refinancing, go to our Home Loan Refinancing page.
Construction loans can be more complex and involved than standard home loans, particularly when the extra policy requirements for sole traders are taken into account. We will make sure your application is prepared and packaged the right way. Want to know more about building your home? Check out our Construction Home Loans page
Depending on your sole trader profession, you may even be eligible for a Lenders Mortgage Insurance waiver and/or reduced deposit requirements for your home loan. To check if your profession may be eligible, check out our page on No LMI Home Loans for more details.
Not sure whether to fix your home loan or leave it on variable? There are definite pros and cons to both home loan types. Our mortgage brokers will cover these and much more in your detailed preliminary assessment before we look to apply anywhere. For more info on the various home loan types, see our pages on Variable Rate Loans and Fixed Rate Loans.
Working with a mortgage broker can make navigating the sole trader policy requirements of lenders much easier. We are able to advise upfront which documents the bank will need, what they are looking for and what your borrowing capacity is based on these documents.
Other things to consider when looking to apply for a home loan as a sole trader include:
Knowing how to workshop these items is especially important for self employed home loans. We are very familiar with the policies on offer with different banks and are experts in matching you with the right bank for your individual circumstances.
The documentation required for a sole trader is quite different to an employee and can also vary lender to lender. That being said, there are some documents that are quite standard for self employed borrowers:
Most lenders will require the two most recent financial years of tax returns to validate your income. For a sole trader this information is usually included in your personal tax returns. If your income is particularly complex, the lender may also ask for business financial statements. Different lenders have different cut-off dates when they will require a new financial year’s information and we will advise you of these requirements
You will also be required to provide your Notice of Assessment for the years that correspond with the provided tax returns. The Notice of Assessment is the document provided by the ATO once your tax return is lodged for a given year and shows your taxable income and tax refund/tax amount owing.
If you are buying, you will need to provide bank statements to confirm that you have sufficient savings for the purchase you are looking to complete. We will go through deposit and evidence requirements as part of our Home Loan Application Process.
If you are looking to refinance an existing home loan, you will be required to provide 6 months of statements for the loan to show that you have satisfactory account conduct. If you have any known issues with your repayments, please advise your mortgage broker.
As with any home loan application, having a clean credit file is very important for your home loan application. If you have any known issues on your file or missed repayments on existing facilities, please let your mortgage broker know so we can manage it appropriately.
Most lenders are completely fine with sole traders as applicants as long as the application is properly prepared. Most lenders will provide the same turnaround time for a sole trader application that they would for a salaried employee’s application.
We will cover your borrowing power in full detail as part of your initial preliminary assessment. While borrowing capacity calculators can provide a rough guide, it is particularly important for tax returns to be analysed and an assessment prepared for sole trader applicants.
While some banks may not accept self employed applicants, there are many lenders who are completely accepting of sole trader income. The main restriction to acceptance is not having two years of tax returns and the application not being properly analysed and packaged before being sent to the lender.
We offer free property reports via the request form on our Home Page. These reports are powered by CoreLogic RPData and can be an excellent way to get a guide on the price of your property. That being said, we will conduct a proper valuation with any home loan application to be sure of what the property value accepted by the lender is before submission.
