How much can I borrow if I'm self-employed?

Any general questions you might have in regards to loans and finance.
Kathy101
Posts: 4
Joined: Mon Feb 04, 2019 7:06 pm

How much can I borrow if I'm self-employed?

Postby Kathy101 » Mon Feb 04, 2019 7:08 pm

Hello,

I’m looking to purchase an apartment in Sydney that’s currently priced at $450,000. I just completed my university studies and I am making my earnings off of piano lessons over the past 14 months. I don’t know if I need to present any income evidence, but I’m pretty sure that I wouldn’t have everything needed to apply for a home loan since teaching piano is my first job.

As a sole business owner, I operate using my own Australian Business Number (ABN).

Looking forward to your reply.

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Otto Dargan
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Re: How much can I borrow if I'm self-employed?

Postby Otto Dargan » Mon Feb 04, 2019 7:26 pm

Hi Kathy,


Welcome to the forums.

Based on your situation, most lenders will limit your borrowing power to 80% of the property value.

The reason is that your sole income comes from your piano lesson business and you have only been running your business for 14 months.

Assuming that you haven't completed your latest personal and business tax return, there are certainly low doc loan options available.

Specifically, you'll have to apply with a lender that will accept less than 2 years' ABN.


Obviously, to be considered, you'll need to have a larger deposit.

It's also worth noting that Lenders Mortgage Insurance (LMI) will apply when borrowing over 60% of the property value.

For standard borrowers with full financials, LMI only applies after 80 LVR.


Please call us on [b]1300 889 743[b] or enquire online to find out if we can help you qualify as a self-employed borrower with less than 2 years ABN.


Cheers,
Otto
Otto Dargan
Mortgage Broker
P | 1300 889 743
Home Loan Experts

Kathy101
Posts: 4
Joined: Mon Feb 04, 2019 7:06 pm

Re: How much can I borrow if I'm self-employed?

Postby Kathy101 » Mon Feb 04, 2019 7:40 pm

Hey,

Hmm. Thanks for that. It sounds like a lot of hassle but it gives me something to think about. Are there any other ways through which I can qualify for the loan? Any help would be appreciated!

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Otto Dargan
Mortgage Specialist
Posts: 7585
Joined: Sat Sep 06, 2008 5:55 pm
Location: Sydney, Australia
Contact:

Re: How much can I borrow if I'm self-employed?

Postby Otto Dargan » Mon Feb 04, 2019 7:54 pm

Hey Kathy,


Given your situation, one option that might be of interest to you is the guarantor home loan.

With a guarantor home loan, you can borrow 100% of the purchase price, you don’t need a deposit and you also don’t need to pay the LMI.

Your guarantor, will provide a guarantee for your home loan which is secured on their property. Once you have paid off a portion of your loan or your property has increased in value, you can apply to remove the guarantee.


Cheers,
Otto
Otto Dargan
Mortgage Broker
P | 1300 889 743
Home Loan Experts

Kathy101
Posts: 4
Joined: Mon Feb 04, 2019 7:06 pm

Re: How much can I borrow if I'm self-employed?

Postby Kathy101 » Mon Feb 04, 2019 8:22 pm

Hey! I really appreciate you helping me out. I will ask my parents if they’d be willing to be my guarantors. Just one last question! Can you tell me how much would I have to pay in LMI if I apply for a low doc loan?

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Otto Dargan
Mortgage Specialist
Posts: 7585
Joined: Sat Sep 06, 2008 5:55 pm
Location: Sydney, Australia
Contact:

Re: How much can I borrow if I'm self-employed?

Postby Otto Dargan » Mon Feb 04, 2019 8:32 pm

Hey,


The LMI premium rates table can tell you the premium rate you will be charged by one of our major lenders if you were to apply for a low doc home loan.

The amount of LMI you’d have to pay varies depending on the lender and their risk appetite and how their LMI provider is.

. Our mortgage brokers specialise in low doc mortgages.

They can quickly assess your situation and get back to you with an option that's right for you..

You can also call us on 1300 889 743 or fill in our free assessment form and one of our expert mortgage brokers can help you through the process.


Cheers,
Otto
Otto Dargan
Mortgage Broker
P | 1300 889 743
Home Loan Experts

Kathy101
Posts: 4
Joined: Mon Feb 04, 2019 7:06 pm

Re: How much can I borrow if I'm self-employed?

Postby Kathy101 » Mon Feb 04, 2019 8:58 pm

Alright! I will be calling you soon. Thanks for all the help.


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