How can a freelancer get a home loan approved?

Any general questions you might have in regards to loans and finance.
Post Reply
User avatar
Otto Dargan
Mortgage Specialist
Posts: 7730
Joined: Sat Sep 06, 2008 5:55 pm
Location: Sydney, Australia
Contact:

Re: How can a freelancer get a home loan approved?

Post by Otto Dargan »

Hello Carlton. Welcome to the forums.

Getting your home loan approved depends on how lenders will assess your application. Most lenders might think that your income is inconsistent and is project-based. Therefore, you will be subject to stricter lending criteria and might reduce your borrowing capacity.

However, if you do meet their lending criteria and provide the required documents to prove your income, you can borrow:
  • 90% of the property value if you have strong income and paid all your debts on time. Lenders mortgage insurance will be charged if you borrow over 80% of the property value.
  • 95% of the property value if you have a clean credit history, strong income, reasonable asset position, minimal debts and have at least 5% in genuine savings.
  • 105% of the property value if you can get a home loan with a guarantor. Once the loan drops down to 80% of the property value, then you can remove the guarantee.
Give us a call on 1300 889 743 or fill in our free assessment form to find out if you qualify for a home loan as a freelancer.

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

User avatar
Otto Dargan
Mortgage Specialist
Posts: 7730
Joined: Sat Sep 06, 2008 5:55 pm
Location: Sydney, Australia
Contact:

Re: How can a freelancer get a home loan approved?

Post by Otto Dargan »

Hi Carlton,

Australian lenders deal with self-employed borrowers regularly so you’re more likely to get approval if you can qualify as one. This means you’ll need to have an Australian Business Number (ABN) and have completed your financials for at least two years.

They work on a contractual basis and are not committed to long term employment.

Therefore, you will need to provide lenders: Your tax returns will prove that your income is consistent and ongoing. Therefore, most lenders require freelancers to be employed for at least two to three years.

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

User avatar
Otto Dargan
Mortgage Specialist
Posts: 7730
Joined: Sat Sep 06, 2008 5:55 pm
Location: Sydney, Australia
Contact:

Re: How can a freelancer get a home loan approved?

Post by Otto Dargan »

Hi Carlton,

Having multiple credit cards might be a red flag for lenders as it might indicate that you are living beyond your means. However, if you have been able to make regular repayments and never used the cards to their full limit, then banks and lenders will look at this favourably.

If you have unused credit cards, it is best to cancel them, as most lenders will assume that you use credit cards fully drawn to the limit.

If your repayments are made on time, some banks and major lenders don’t even take your credit limit into consideration when assessing your borrowing power and instead use the largest balance on your card from the last three months.

You can learn more about improving your borrowing power here.

Give us a call on 1300 889 743 or fill in our free assessment form and we will work with you to get the amount you need.

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

Post Reply