It’s great to be your own boss, isn’t it? Working at your own pace, calling the shots and creating something of your own is quite an exhilarating journey for sure.

Yes, there are challenges, and if you are a self-employed individual or a small business owner, you’d agree that securing a home loan is only one of the challenges you face along the way.

Lenders have always been wary of self-employed individuals, considering them to be higher risk, as it is difficult for the banks to calculate the income of self-employed borrowers as compared to regular PAYG borrowers.

With no salary slips to substantiate your income if you are self-employed, lenders need to look into your tax returns and profit and loss statements to gauge your financial situation. However, that only means you need to work a little harder to prove your income to the bank – and with an expert by your side, it isn’t too hard to do so!

Calculate your eligibility
– As a self-employed borrower, it is important to assess your eligibility for a home loan based on your current income.

“A mortgage broker will look at your past two year’s tax returns to work out how much you might be able to borrow. Sometimes, business owners show reduced taxable income that can impact their borrowing capacity. If you earn enough to service a higher home loan, but your paperwork shows lesser income, speak to your accountant about the situation to improve your borrowing capacity,” explains Nathan, HashChing mortgage broker.

Get the supporting paperwork
– Once you know how much you can borrow, you need the supporting paperwork to prove your financials. As a business owner, while you do not have the regular income proofs required to apply for a home loan, you can always use the following alternate documents to apply for a low-doc home loan:

  • A business activity statement (BAS) for the past 12 months, duly lodged at the Australian Taxation Office.
  • Your personal and company’s tax returns for the past two years.
  • A valid ABN (great if it has been running for at least 24 months). If applicable, it helps if you have registered your business for sales and goods tax.
  • A duly filled income declaration form. This will vary from lender to lender and will usually ask you to list down your ABN, approximate income, information about the loan and a declaration confirming the truthfulness of the information provided. Some lenders may ask you to list down your assets, while others may not.
  • In addition, having a 20 percent deposit will help your case. You might have to pay Lender’s Mortgage Insurance (LMI) if you have anything lesser.

Low-doc loans are particularly popular with self-employed individuals who do not have the regular documentation to apply for a home loan. Low-doc loans require minimal documentation in the form of self-certified income statements and business activity statements, making it easier for self-employed individuals such as contractual workers, taxi drivers, freelancers, as well as, small business owners to get approved for a home loan.

If you are a self-employed individual planning to apply for a home loan, it will help if you have:

  • Been in the business for at least two years before you apply
  • Personal tax returns for the recent year or tax assessment notices for most recent two years
  • Most recent company financial statements and tax returns in case of business owners
  • 100 points of ID (such as your passport, driving license, Medicare card, etc.)
  • Paperwork to establish assets and liabilities

While low-doc loans have declined in the recent past, they offer the best shot at a home loan for those who are not eligible for a regular mortgage in Australia. Mortgage brokers at HashChing have access to multiple low-doc home loan options from lenders across Australia. They will also negotiate on your behalf to get you a better rate on your home loan, apart from holding your hand throughout the application process, at no cost to you.

Explore multiple low-doc home loan deals on HashChing or contact an expert to have our verified brokers guide you.

By Vidhu Bajaj
HashChing Content Writer


HashChing is helping Australians by providing access to the pre-negotiated home loan deals. Obligation free consultation with one of our partner brokers might save you time, hassle and money.

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