Being self-employed does not prevent you from getting a home loan, but lenders assess business owners differently.
How Do Lenders Assess Self-Employed Income?
Most lenders require:
• Two years of financial statements
• Two years of tax returns
• Notice of assessment
Income is typically averaged over two years or based on the lower year.
What If Your Income Has Recently Increased?
Some lenders may:
• Use the most recent year
• Consider accountant letters
• Accept alternative documentation
Full Doc vs Alt Doc Loans
Full Doc Loans:
• Standard financial documentation
• Generally sharper interest rates
Alt Doc Loans:
• Used when tax returns do not reflect true income
• May require BAS statements or accountant declaration
• Often slightly higher interest rates
How to Improve Approval Chances
• Reduce personal debt
• Minimise credit card limits
• Ensure tax and BAS lodgements are up to date
• Avoid large unexplained business expenses
Final Thoughts
Self-employed lending is about strategy and selecting the right lender. Getting advice before applying can reduce the risk of unnecessary declines.