It might be harder to show a lender that you make money from a small business than to show pay stubs, but that doesn't mean you can't get a home loan. You can do a few things to make the process of getting a home loan as easy as possible.
Take care of your own finances.
When it comes to saving for a tradie business coach in Brisbane and getting the money you need, a little bit of planning can go a long way. To get started:
Check your budget to see if you can do more to save money regularly and pay off debt. Saving more now will help you build up a bigger deposit, and a strong history of steady savings and regular debt payments could make a big difference when you apply for a loan.
Follow up on any unpaid bills to get the most money possible.
Ensure that your personal and business money are distinct. Keep in mind that unless you are a sole proprietor and borrow in your own name, money retained within your business structure cannot be recognized as an asset.
Pay down your own debts, like credit card debt. If you have overdrafts or credit cards that you don't use, you might want to cancel them or lower your limit. The more likely it is that you will be approved for financing, the less you already owe and the better your credit history.
Talk to your accountant about what else you can do to get your finances in order and show how well your business is doing.
You must be able to show that you can keep track of your finances and pay bills and loan payments when they are due. As part of the application process, lenders will review your credit history. You can get a free copy of your credit report online from agencies that keep track of your credit. Your application will also look better if you can show that you have saved money regularly for a long time.
Numbers are important.
Lenders will want to know how much you earn, your ability to service debt, and whether you have a history of making regular payments into a savings account if you own your own business and experience income changes.
To increase your chances of acceptance, you'll need to demonstrate that your business has been operating steadily, and the more current and accurate your documents, the better.
Prepare your paperwork
Whether you go to your lender's office or apply for a home loan online, you'll need to bring a number of documents.
Identification: This can be a passport, a driver's license, a birth certificate, or something else like a utility bill that doesn't have your picture on it.
Earnings statements: Bring along your:
Personal tax returns for the two most recent years along with the most recent ATO Notice of Assessment or a letter from your accountant confirming the tax returns are final and have been lodged with the ATO; Most recent business tax return and business financial statements detailing the past two years' profit and loss.
If you don't have this information, talk to us about other options, and if you pay yourself a regular salary, ask about our simplified verification process.
This can contain bank account statements as well as information regarding personal and/or credit loans and debts, current investments (such as term deposits and shares), existing assets (such as a car), and regular outgoings.
Other earnings: If you earn rental income or get government payments, please supply the appropriate documentation to demonstrate this.
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