4 Tips for Self-Employed Home Loan Applications
Applying for a mortgage when you’re self-employed can feel like jumping through more hoops than the average borrower. But don’t let that stop you from getting into the property market. Here are four key tips to help you apply for a mortgage with confidence.
Being Your Own Boss? Here’s What Lenders Want to See
Running your own business comes with plenty of perks—flexibility, independence, and the ability to build something on your own terms. But when it comes to getting a home loan, lenders tend to see self-employed applicants as a higher risk. That’s because, unlike salaried employees, your income might fluctuate from month to month.
The good news? With the right preparation, you can boost your chances of approval and secure a loan that works for you.
1. Get Your Finances in Order
Lenders want to see that you can manage money well and make consistent repayments. To strengthen your application:
Build up a solid credit score—pay bills and existing debts on time.
Cut unnecessary expenses—a leaner budget can make you look more financially stable.
Save for a bigger deposit—a higher deposit can lower lender risk and boost your borrowing power.
Keep clean financial records—using accounting software like Xero or MYOB can help you stay organized and provide up-to-date financial statements.
2. Get Your Paperwork Ready
Unlike salaried employees who can show a couple of recent payslips, self-employed borrowers need to provide more extensive documentation. Most lenders will ask for:
At least two years of personal and business tax returns
Profit and loss statements prepared by an accountant
Business activity statements (BAS)
Personal and business bank statements
Proof of assets, savings, and investments
If you rely on “cash jobs,” keep in mind that unreported income won’t count towards your borrowing capacity. And while some lenders offer low-doc loans, these often come with higher interest rates or require you to pay lenders mortgage insurance (LMI).
3. Choose the Right Lender
Not all lenders are self-employed-friendly. Some are more willing to work with business owners, while others prefer traditional income earners. The key is knowing where to apply.
Every time you apply for a loan, it leaves a mark on your credit file. Too many applications can raise red flags. That’s why it’s crucial to target lenders who understand self-employed borrowers and have a track record of approving these types of loans.
4. Work With a Mortgage Broker
Applying for a home loan when you’re self-employed can be tricky—but you don’t have to navigate it alone.
A mortgage broker (that’s us!) can help you:
Understand your borrowing capacity
Identify self-employed-friendly lenders
Gather the right documents
Improve your chances of loan approval
If you’re self-employed and thinking about buying a home in 2025, get in touch with us today. The sooner you start preparing, the better positioned you’ll be to secure the right loan for your situation.
Disclaimer: This article provides general information and should not be considered financial or tax advice. It does not take into account your personal circumstances. Always seek professional advice before making financial decisions. This content is protected by copyright laws and cannot be modified, reproduced, or republished without prior written consent.
