Self-employed and looking to get finance to buy a property or refinance an existing home loan?
You are considered self-employed if you do not have a regular fixed income as a salaried wage earner. This can make it tough when you own your own business, operate as a sole trader, consultant or freelancer to get a home loan from traditional lenders.
Luckily Yard is here to help with loans designed for the self-employed. They are a way to acquire a home loan for people with income and assets but without the regular ways to prove this.
Let’s take a closer look at self-employed loans and what’s required to qualify.
A self-employed home loan is a type of mortgage designed for people running their own business - including sole traders, consultants or people working as freelancers.
Non-bank lenders are well-suited for this type of loan because they adopt a more flexible approach to income verification and serviceability, considering a broader range of income sources. Serviceability is a lender’s assessment of your ability to repay a mortgage or home loan.
They often require streamlined documentation compared to traditional banks, verifying bank statements or accountant declarations, instead of comprehensive tax returns. This flexibility makes it easier for self-employed borrowers to meet the requirements and secure financing based on their unique financial situation.
When applying for a home loan as a self-employed individual, traditional lenders (like banks) typically require you to have been self-employed for at least two years. Non-bank lenders, like Yard, have a more streamlined and flexible approach. For example, we can consider applicants who have recently become self-employed and have traded under an ABN for at least 6 months.
Yard can do a full documentation loan - where tax returns and an ATO notice of assessment would be required, or a low documentation loan where income can be verified using a variety of sources, including:
We will also perform a valuation on your property, to ensure the property is in a good state, and the property value is as per your estimate. The property also needs to meet our credit criteria for us to lend against it.
Tip: The key to approval is showing consistent income, business growth, and a clear trend of increasing earnings over time.
Conditions attached to a self-employed home loan vary depending on the lender, with a distinction between traditional lenders (like banks), and non-bank lenders. A few examples of these differences are:
Traditional lenders would require:
Non-bank lenders also need the above documentation for a full doc loan, but will have more flexible criteria for a low doc loan.
Non-bank lenders typically allow a greater number and amount of non-recurring expenses to be added-back to the business’s net profit. These include depreciation, amortisation, one-off asset write off, motor vehicle expenses, voluntary superannuation payments, startup costs, director fees, etc.
Unsure if you qualify? Get in touch with one of our loan experts to discuss your circumstances.
You could also consider a low doc home loan.
Low doc (low documentation) loans are a way to acquire a home loan for people with income and assets, but without formal ways to prove this. These loans streamline the application process by being more flexible when it comes to income verification. Instead of relying solely on payslips and tax returns, non-bank lenders - like Yard - accept alternative evidence such as an accountant’s letter, business activity statements (BAS), or bank statements to assess your financial position.
Have questions about self-employed home loans? Read our FAQ below, or our local team is available to chat at a time that suits your schedule.
It depends what type of home loan a sole trader is applying for. To apply for a full documentation loan, sole traders typically need to provide 2 years of personal tax returns along with ATO tax assessment notices. This provides a clear picture of their income and financial stability. For a low documentation (low doc) loan, less paperwork is required, often including simplified documents such as business activity statements (BAS), bank statements, or an accountant’s declaration - making it a more flexible option for those with irregular or complex income.
While most lenders require at least two years of self-employment history, we can consider applications from sole traders who have been operating for as little as six months. This flexibility allows us to assess your unique financial situation and provide personalised loan options. Demonstrating income growth and prior experience in the industry or sector are also crucial to having your application approved.
Traditional lenders often have stricter requirements for self-employed applicants, and tend to focus their products on salaried individuals. Non-bank lenders, like Yard, take a more flexible approach and consider your unique circumstances, including alternative income verification options beyond tax returns. With a minimum of 6 months ABN registration, you could be eligible for a Yard home loan. Get started with our streamlined online application and a Yard Loan Consultant will guide you through the process, simplifying your path to property ownership.
New loan inquiries: hello@yard.com.au
Service requests: help@yard.com.au
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