Property

How to buy a home when you're self-employed

RUNNING your own show is a dream for many workers - and it doesn't have to mean sacrificing that other great Australian dream of home ownership.

Self-employment can be personally and financially rewarding, and the latest Household Financial Comfort Report from ME Bank confirms that since mid-2014 self-employed workers have enjoyed a rise in financial comfort levels.

That's good news for the self-employed sector, and now could be the time for small business owners to take the plunge into home ownership - especially while interest rates are at record lows.

>> Hockey tells home buyers to get job that pays well

>> First home buyers need 'ambition': Abbott defends Hockey

>> Why Joe Hockey's comments are so appalling

Information is king

The process of securing a home loan isn't always as straightforward for self-employed workers as it is for traditional employees.

But that's not to say it can't be done.

The key stumbling block for lenders is determining whether self-employed borrowers have the capacity to manage loan repayments.

A PAYE borrower can provide pay slips as evidence of stable income, but most business owners would agree that their income fluctuates from time to time.

On the plus side, getting the right paperwork together can boost your chances of loan approval.

In particular, lenders look for consistency of income − this demonstrates that your business is ticking along and generating the income needed to maintain your loan repayments.

You'll need financial statements for the past two years, plus have both your business and personal income tax returns lodged and notice of assessments up to date.

Banks rarely accept financial statements that have not yet been lodged with the Australian Taxation Office.

Give your finances a spruce up

Further enhance your prospects of loan approval by tidying up your personal finances.

In determining loan eligibility lenders look at the credit limit on all your credit cards (not just the outstanding balance), so it can pay to cancel any unwanted cards and request a reduction in the limit on those cards you wish to hold onto.

Aiming to build personal savings over a period of six months will help to fund a home buying deposit, and it also demonstrates to lenders that you have the capacity and discipline to manage a home loan.

Seek advice

After you have all your paperwork together, make a date to speak with your broker or lender to establish what you can realistically afford to borrow.

This is critical to ensure you don't overcommit yourself.

Aim for a competitive rate

Finally, when it comes to selecting your loan, be wary of products pitched specifically at self-employed people, especially "low-doc loans".

These may require less paperwork but you can expect to pay a much higher interest rate.

If you can prove your income through up to date tax returns it is worth aiming for a regular "full documentation" loan and enjoying the savings of a competitive rate.

The top five things you need to know when buying a home:

  • Don't buy if you can't stay put
  • Start by shoring up your credit
  • If you can't put down the usual 20 percent, you may still qualify for a loan
  • Buy in a district with good schools
  • Before house hunting, get pre-approved

Topics:  gladstone property market real estate self-employed



Foodies' scavenger hunt: are you up for it?

IF YOU want to give your tastebuds the flavour sensations of a lifetime, here is the ultimate foodie’s scavenger hunt through Brisbane.

5 minutes with Israel Folau on footy, life and love

Israel Folau and Silver Fern netballer Maria Tutaia announced their engagement last last year.

WE CAUGHT up with football star and Brisbane ex-pat Israel Folau.

10 reasons to head to South Bank this summer

Head to the only inner-city beach in Australia!

South Bank has a ridiculous amount of fun things to do.

Five mammoth events you need in your life

No Caption

BRISBANE isn’t known for doing things by halves…

How to make your child's every dream come true...

Take a dip at South Bank in the inner-city beach.

‘I DON’T want to do fun things, Mum and Dad’… said no child ever!

How to do Eat Street the right way

Know where to start and where to end to avoid a huge food coma before you get to experience all the goodies!

EVERY Friday and Saturday night, Hamilton comes alive.

You can do WHAT in Brisbane?!

Talk about arriving in style! Take your pub crawl to the next level with a helicopter!

BET you didn't know you could do these things in Brisbane...

'Volatile': Power company says deal was offered to BSL

Aerials of Boyne Smelter Limited (BSL) from early 2013. Photo Contributed

Commitment to securing a deal hasn't dwindled just yet for BSL.

BREAKING: 'Lost everything': Barney Point house ruined by fire

Emergency crews battle a house fire at Barney Point.

Reports a Barney Point house is on fire.

Local Partners

Why council workers will be peeking in Gladstone region yards

From January 30, council officers will spend six months visiting houses throughout the region to ensure all dogs are registered, desexed and microchipped.


New Year New Yard

Win $1000 Bunnings Voucher
Learn More

Puppetry of the Penis secrets revealed ahead of show

The famed Puppetry of the Penis is coming to the Sunshine Coast for shows in Noosa and Caloundra.

WARNING: This interview contains adult themes and traces of nuts

Noll meltdown won't affect Gympie Oz Day concert

Shannon Noll

Photo Contributed

Shannon Noll is still expected to perform in Gympie next Thursday

11 huge events coming to Gladstone in the next 6 months

Events coming up in Gladstone in 2017.

Your guide to exciting events coming to the Gladstone region

Kristen Stewart to host SNL

Kristen Stewart will host a pre-Super Bowl episode of SNL next month

Louis Tomlinson celebrated his son's first birthday

Louis Tomlinson and Briana Jungwirth celebrate son's first birthday

Kylie Minogue will take husband's name

Kylie Minogue will take her fiancé Joshua Sasse's surname

Nicole reveals her biggest parenting challenges

Actress Nicole Kidman.

Nicole Kidman says her kids are ‘deeply attuned' to her moods.

Suicide Squad director reveals his regrets about the film

Margot Robbie in a scene from the movie Suicide Squad.

DIRECTOR of superhero flick on what he’d change about ‘flawed’ film.

Meet the new Marco on MasterChef Australia: Yotam Ottolenghi

Israeli-born, London-based chef Yotam Ottolenghi will be a guest chef for a week on the 2017 season of MasterChef Australia.

AFTER Marco’s defection to Seven, MasterChef signs a true food hero.

Stockland's $150m pitch: Build it and they will come

Gladstone Marina. The Gladstone Regional Council offers a range of exciting job opportunities. Photo Contributed: Murray Ware.

Here's why we need to see Stockland upgrade start soon.

By the water's edge

Secure your seachange

Gladstone market's confidence coming back for 2017

Core Logic property statistics reveal the region's median house price dropped 16.7% to $275,000 in the September quarter.

Region's median house price drops 16.7% to $275,000

HOT PROPERTY: Money to spend on land, buildings

File picture.

Sale, leasing of industrial real estate picks up in Mackay

Collapsed Coast company could owe up to $5 million

Staff, ATO, landlords among those out of pocket.

Ready to SELL your property?

Post Your Ad Here!