Loan tips for self-employed borrowers

Loan tips for self-employed borrowers

Handy hints for home loan hunting if you’re self-employed.

For borrowers who are self-employed or sole contractors, securing a loan for a home or investment can be difficult.

Whether you have irregular income, contract or seasonal work, the list of documentation requirements from many lenders can seem impossible.

But searching for a home loan doesn’t need to be daunting.

Here are a few tips that can help you prepare for buying your next property:

Where's the proof?

When assessing an application, lenders look to see you can afford to repay the loan.

Traditional lenders will generally want to see two years’ tax returns and financial statements to confirm consistent income will cover any new and existing debts.

It's important to be upfront about what's going on in your business. This is particularly essential if there are any large fluctuations in the taxable income shown on your annual financial statements from one year to the next.

Talking to a financial adviser or tax professional to get your tax returns in order is often a good first step before starting the loan application process.

No returns?

For many self-employed people, providing the two most recent tax returns isn’t always possible. The good news is that there are still options.

Some lenders are more flexible and will accept alternative ways to verify your income. This might be by providing bank trading statements or a letter from your accountant confirming your income.

Seek help

A Mike Pero Adviser can look at your situation, and with their knowledge of the various lenders and home loan products available in the market, help find an option tailored to you.


Mike Pero (New Zealand) Ltd Copyright © 2020 All rights reserved | Lending and policy criteria and terms and conditions apply. Content on this website is general in nature and is not a recommendation, opinion or guidance to any individuals in relation to acquiring or disposing of a financial product. Readers should not rely on this content and should always seek specific financial advice appropriate to their own individual circumstances.