Self Employed Home Loans Sydney

Better Home Loans For Busy Business Owners And People With Unconventional Lending Circumstances

No matter if you are a business owner on your own, if you operate with a company structure, or if you use a discretionary trust, if you are seeking a mortgage, refinancing options, or investment opportunities, we can help.

We are proud to offer services to Sydney, and the adjoining suburbs.

Rather than making the journey to us, we can meet your needs on the phone or through a video link, so you don’t need to come to us.

With access to an extensive network of 49+ lenders, we can find a mortgage solution tailored to your individual needs, and source the best possible interest rates for your loan.

As your local Sydney mortgage broker, I am available to provide help regarding your home loan and business lending needs.

Access to more lenders to get you the right finance for your situation, fast

Loans are structured to protect you, your credit rating

Specialists in helping business owners with unconventional lending circumstances

Complete done-for-you service (including paperwork)

Getting A Loan When You’re Self Employed

Getting A Loan When You’re Self Employed

Australia has a thriving entrepreneurial culture, with many individuals choosing the path of self-employment. Although this lifestyle offers numerous benefits like flexibility and independence, it may present some hurdles, especially when it comes to securing loans.

For instance, getting home loans for self employed individuals differs from someone employed on a Pay As You Go (PAYG) basis. While the validation process for personal information remains the same, such as age, credit history, and living expenses, the verification of income differs.

Those with PAYG employment typically provide two recent pay slips as proof of income. However, home loan self employed Sydney applicants must provide their business financial records to confirm their income.

Fortunately, with the right preparation, you can increase your chances of successfully getting a loan.

Self-employment implications

In Australia, you’re considered self-employed if you run your business or trade as a sole trader, in a partnership, or through a trust or a company. You’re essentially not working for an employer who pays you a regular wage or salary. This category also includes freelancers, independent contractors, and gig economy workers.

A PAYG employee is considered low risk because lenders can scrutinise their bank statements to cross-check the salary credits, ensuring the figures on the pay slips match the actual deposits in their accounts. However, income validation isn’t as straightforward for self-employed individuals because the lender needs to go beyond your personal finances and consider your business’s capacity to pay. This is why lenders usually require evidence of at least two years of trading or business history.

Suppose you are a self-employed contractor for 1 year getting a home loan. In that case, banks and lenders may view you as a riskier borrower than someone who has successfully managed their business and maintained a stable income over multiple years.

Generally, the higher the perceived risk, the more cautious lenders may be in approving your loan application. They may require additional conditions, such as a larger deposit or even hesitate to grant the loan. It’s worth noting that some lenders do offer specialised loans designed specifically for when self employed individuals decide to apply.

However, there is an option for those who have recently gone into business for themselves but have a long industry history. In such a scenario, you could consider applying for a low documentation loan, where your longstanding industry experience may be considered, despite your somewhat sparse business records.

Risk implications for contractors, consultants, single entities, and company directors

While it’s expected that PAYG employees are considered low-risk, company directors getting classified as high-risk is a different story. Here’s how different self-employed individuals rate in terms of risk:

  • Contractors

Contractors having long-term contracts are often seen as low-risk, while those with short-term contracts in the same industry and line of work are usually perceived as medium-risk.

Contractors are expected to provide a copy of their contract and bank statements demonstrating that payments have indeed been received. If the contract is nearing its end with less than six months remaining, proof of a contract renewal might also be required.

To qualify as a contractor, you must not be a director of the company you’re working for. If you hold a director position, please refer to the section on Directors, or if you are contracting under an ABN, see the section pertaining to sole traders.

  • Consultant

Consultants’ classifications can vary based on their work setup. A consultant who is employed by a company and earns pay slips from that entity will be treated as a PAYG employee. On the other hand, a consultant who offers their services under their own company or ABN and holds a position as a director or operates as a sole trader, will be considered self-employed.

  • Sole trader

Sole traders considered self-employed are typically classified as medium-risk candidates by lenders. To show proof of income, sole traders must provide their tax returns, a notice of assessment, and a letter from their accountant.

  • Company director

Company directors are categorised as high-risk by some lenders. If you are a director of a company from which you draw income, lenders consider you self-employed.

Even if you generate payslips through your company, a lender will need comprehensive financial information about the company. For instance, the lender generally requires the last two financial years or draft returns. Your income capacity will then be evaluated based on the financial state of your business, with the income you draw from the business being of lesser importance.

Lenders will also conduct thorough background checks on the company to confirm directorship status and history, any debts with the ATO (Australian Taxation Office), and whether the company is registered for GST (Goods and Services Tax), often a proxy for anticipated revenue.

However, it’s important to remember that due to responsible lending practices, not all lenders offer low doc loans. If your business has been operational for less than a year—despite your extensive experience working for another employer—the approval of your loan application remains at the discretion of the lender.

Loans available to a self-employed person

Here is a brief overview of the different types of loans available to qualified individuals:

  • Home loan: This loan is typically used to purchase a residential property for the borrower to live in. It’s often secured against the property itself, and the term usually spans 15 to 30 years.
  • Investment property loan: Like a home loan, an investment property loan is used to purchase residential property. The key difference is that the purchased property is intended for investment purposes—for example, to rent out to tenants—rather than for the borrower to occupy.
  • Commercial property loan: This type of loan is used to purchase property for commercial use, such as office buildings, retail space, warehouses, or other business premises. These loans may have different terms and conditions compared to residential loans.
  • Short-term loan: Short-term loans are typically used to meet immediate financial needs and are generally repaid within a year. These could be personal loans or business loans meant for covering cash flow gaps, unexpected expenses, or funding small-scale projects.
  • Asset and equipment finance: This type of business loan helps companies purchase necessary assets or equipment for operation. The loan is usually secured by the asset or equipment, reducing the lender’s risk.
  • Debtor finance: Also known as invoice financing, this loan allows businesses to borrow money against their outstanding invoices. This can help businesses maintain steady cash flow, especially if their clients have long payment terms.

Each of these loans serves different purposes and will have varying interest rates, loan terms, and qualification criteria. If you’re unsure about which type of loan best suits your needs, it would be beneficial to speak with a financial advisor or broker.

Loan options: bank or mortgage broker

As a self-employed individual, you can either go directly to a bank or use a mortgage broker to secure a home loan. Both options have their own benefits and potential downsides.

  • Direct to bank: Going directly to a bank allows you to engage and negotiate with the lender firsthand. You can ask specific questions, get immediate responses, and potentially leverage any pre-existing relationships with the bank. However, banks can only offer their own products, and the terms may not be as flexible, especially for home loan self-employed applicants.
  • Mortgage broker: Mortgage brokers have access to a variety of lenders, including banks and non-traditional lenders, and a wide range of loan products. They can assist in finding a lender who is more understanding of self employed home loan applicants and offers competitive loan terms.

Brokers also help with paperwork and liaise with lenders, which can simplify the application process. They are paid a commission by the lender, which should be disclosed to you. It’s essential to ensure that the broker is working in your best interest and not just steering you towards the lender who pays the highest commission.

For self-employed individuals, using a mortgage broker might be beneficial due to their broader range of options and expertise in dealing with more complex financial situations. Regardless of the route you choose, it’s important to do your research, understand the terms of the loan, and ensure it fits your financial situation and goals.

Required documentation

For instance, if you are planning to apply for a home loan as self employed, you’ll need to provide several important documents to potential lenders. These typically include:

  • Net Income: This refers to your business income minus expenses, as shown on your tax returns. For partners, this will typically be your share of the net partnership income plus any salary or wages. For a trust, the income of the trust that is distributed to you will be considered.
  • Credit history: Your personal credit history will significantly determine how much you can borrow. Lenders use your credit score and history to assess the risk of lending to you.
  • Existing debts and liabilities: Your existing debts will be subtracted from your income to evaluate your serviceability, i.e., how much you can afford to repay.
  • Value of the property: For home loans, the value of the property you are purchasing will directly impact the loan amount. Most lenders offer a Loan-to-Value Ratio (LVR) of up to 80% of the property value. Some lenders might offer up to 95%, but this often comes with the necessity of paying Lenders Mortgage Insurance (LMI).
  • Deposit size: A larger deposit can help increase the amount you can borrow, as it reduces the LVR and the risk to the lender.

Generally, most lenders use a formula or a borrowing power calculator to determine how much they are willing to lend. The specific lending criteria may vary significantly between lenders, and some might be more willing to lend to self-employed individuals than others.

It’s crucial to consult with a mortgage broker or financial advisor to understand your borrowing capacity better. They can guide you through different lenders’ policies and help you maximise your borrowing power.

Conclusion

Securing a loan as a self-employed individual can be challenging, but the odds can be increased with careful preparation and sound financial practices. Utilising the services of a mortgage broker and presenting solid financial credentials can make a significant difference. Remember, maintaining a healthy credit score is crucial in facilitating loan approval.

How We Help Business Owners Get A Better Home Loan

Over the past 13 years we’ve helped hundreds of self-employed business owners get home loans with better interest rates, lower fees, and more flexible conditions.

The Right Loan For Your Situation

Unlike other banks and brokers that most commonly cater for wage earners (not business owners), and are restricted to selling their own or brand-approved lending products (whether they are right for you or not), we specialise in working with business owners and have access to hundreds of loan options from dozens of lenders to ensure you get the right loan for your situation.

We Don’t Just Find You a Loan

While other banks and brokers merely find you a loan, we look at your whole financial situation and help you structure your finance to protect your assets.

We Even Do The Paperwork

Once we find the right home loan, we pre-fill all the forms to save you time and maximise your approval success. And we review everything each year to ensure you’ve always got the right home loan for you.

Testimonials

Other Self-Employed Business Owners and Individuals We’ve Helped

If you’ve ever tried to get a loan from your bank, you’ll know how hard (and often disappointing) it can be. But it doesn’t have to be that way. Take a look at what some of our clients say about how we helped them get finance for their home, investments, and business:

The team at Pro Options has more than 48 years of combined experience helping self-employed business owners and other indiviuals  get fast approval for better finance. Here’s what some of them say about their results and experience with our team:

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We have been using pro options for about 8 years now and they have been able to help us in situations that others considered too difficult. Highly recommended

Jaden Bennett November 3, 2023
On Site

A Huge Thank You To Alex From Our Mortgage Options!!

A huge thank-you to Alex from Our Mortgage Options!! I came across Alex about 18 months ago when my partner and I were trying to get into the housing market as first home buyers. Thank god we found Alex and had him on board to help us with our journey. He guided us all the way from getting our pre approval to buy our land and house making everything so easy and stress free. He found us a great loan and bank, explaining everything we needed to know in plain english. He managed everything related to our bank including progress payments and inspections with his communications always prompt causing no delays. Thank-you Alex for helping us to get our first home:)

Melissa
Melissa October 2, 2023
google

I have been working with Alex for 12 years and he has been wonderful to deal with, his knowledge and client focus have saved me thousands of dollars. Highly recommended!

Carl Brooks September 4, 2023
google

Alex and his team are top notch brokers and always goes beyond the call of duty to help clients, I would recommend his service to anyone needing finance.

Laurence Hugo May 17, 2023
On Site

My Investment Refinance Journey Paid Huge Dividends!!

“As an experienced investor who has required finance for property purchases whether they be for land, units, houses or for construction both in NSW or interstate, I’m always after a better deal. Ultimately the better the deal, the more dollars I can drive back into further investments to achieve my financial freedom dreams and fund my lifestyle that includes a comfortable family home, private school fees for my children, numerous overseas trips, and stepping ever closer to leaving the rat race behind. Recently in this strange Covid-19 world, Alex at Our Mortgage Options managed to refinance my exisiting mortgages and secure me additional construction loan finance that has now paid off handsomely. I’m basically at minimum now $500 a month (or $6000 a year) better off with reduced interest rate payments meaning that the next project after this new property is built, is not that far away. The refinance journey due to financial institution compliance can sometimes be excruciatingly long and frustrating but with Alex in your corner, well worth it!!”

Martin - Western Sydney
Martin - Western Sydney July 1, 2022
google

Alex was extremely helpful throughout our 1st home purchase. He made the process smooth and hassle free. He is well versed in his field and we would recommend his professionalism to anyone who is needing the guidance that he offered in serving us.

Triatan ross August 28, 2017
google

Great mortgage brokers. These guys will give you great advice in terms of the best home loan product. Speak to these guys before going to your bank. You won't regret it.

8 Ways We Help Business Owners
Get A Better Home Loan

Comparing banks and mortgage brokers can be confusing (and time-consuming). But it’s a critical exercise because choosing the right lender can save you thousands in interest & fees, and get you more money, faster. While the wrong lender could…

  • Jeopardise your dream property with long delays
  • Cause you to needlessly overpay in interest and fees
  • Expose your current assets to unnecessary risk
  • And damage your credit rating and future finance opportunities

Here are some of the things we do differently to help you avoid these disaster scenarios and get the right home loan — fast:

Specialists In Small Business and Unique Lending Situations

Business owners who fall outside the rigid lending criteria of banks can find it difficult to get finance. We specialise in helping people who have unique situations including self-employed business owners and those who may have been knocked back for finance in the past.

Potentially Save Thousands With More Lending Options

While most banks and brokers are limited by their in-house or brand-approved loans (whether they are right for you or not), we analyse dozens of loan options from our vast network of lenders to help you potentially save thousands in interest and fees.

Holistic Advice To Help Maximise Borrowing Capacity

Our holistic approach considers your entire financial structure (not just your loan) to help maximise your borrowing capacity, and protect your credit rating.

Solely Serving You And Your Interests

Large lenders are naturally accountable to shareholders and corporate interests (and recommend loans accordingly). We serve you and your interests alone.

Qualifications And Experience

Unlike a mortgage broker, who has to undertake a Diploma of Mortgage Management by law, did you know bank staff (while they may be required to undertake inhouse training) do not need to be formally qualified in finance?

Make no mistake, our team members have the formal qualifications, experience, and ongoing professional development to help business owners achieve their financial outcomes.

Regular Reviews Ensure You Always Have The Best Loans

When did your bank last call to tell you they could give you a better deal on your loans or savings accounts? We will proactively analyse your loan at least once a year (more often if interest rates change) to make sure you’ve always got the right loan for your situation.

Complete Done For You Service

We compare dozens of loans, negotiate the rate with lenders, prepare and package your application for fast approval, and manage the whole process to ensure no mistakes are made. And it won’t cost you a single cent. 

Advice Specific To Your Situation

Whether you’re looking for a new home or business loan, trying to save on your existing loans, consolidating multiple loans, or simply want advice for the future, we invite you for a Consultation where we will share our advice stemming from over 48 combined years of experience.

Our Six ‘A’ System To Help You
Get The Right Finance -- Fast

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ACQUAINTANCE:

We take time to understand your needs and financial situation so we can source and structure the right loan to save you interest & fees while protecting your assets

9

ANALYSIS:

We compare loans from dozens of lenders and negotiate rates, fees, and conditions on your behalf – all at no cost

9

ALTERNATIVES:

We present you with several options, explain all the details, and give you our professional recommendation

9

APPLICATION:

We pre-fill and package your application (saving you hours of admin) for maximum approval success

9

APPROVAL:

We follow up to ensure everything goes smoothly (with no mistakes) right through to settlement day

9

ACTIVE CARE:

We regularly review everything to ensure you can be confident you have the right loan for your situation.

Your Next Step To Get The Right Loan for Your Situation – Fast

The quickest and easiest way to see how to get the right home loan is with a no-obligation Complimentary Consultation during which:

  • You’ll get a firm idea of how much you can borrow and what it will cost in terms of interest, fees, and repayments (so you can confidently plan and even start looking at homes)
  • You’ll learn how to avoid common mistakes that can lead to failed applications and corresponding credit damage (and things you need to do now to ensure your loan application is successful)
  • You’ll get an overview of the different types of home loans and finance structures (and what loans are likely to give you the interest, fees and flexibility you’re looking for)
  • You’ll explore ways our team can help you get better home loan finance so you can potentially save thousands in interest and fees, and get on with building your business (and your life)

Please be assured this consultation is not a sales presentation in disguise. On the contrary, you will receive expert advice specific to your situation.

Naturally, we’d love to help you arrange your finance, but you can certainly take our advice and try to implement it yourself. In any case, you have nothing to lose with a no-obligation complimentary consultation. 

Alex Sperling - Finance/Mortgage Broker

Alex Sperling - Finance/Mortgage Broker

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