Are you self employed and thinking about getting a home loan? Lenders will vary greatly in the way they treat self employed applicants. There are a variety of factors involved in a self employed application. They are often more complex than home loan applications for those whom are payg.
Why Self Employed Applicants Need To Take Greater Care
One example of how lenders may treat self employed applicants, is to do with your company liabilities.
Many self employed applicants with Pty ltd companies will hold company credit cards, leases, overdrafts or other forms of business finance.
Not all lenders will treat these company debts the same way.
How Do Lenders Treat Company Debts?
Some lenders, will make you declare all of your company debts on your personal home loan application.
Even though it is likely that your expenditure for these debts has already been taken out of your company gross profits. These lenders may allow you to add back interest and some depreciation into their calculators for your personal home loan. However this will still have an impact on your personal borrowing capacity. Particularly if you have a high credit limit but tend to pay off your debts on time. Sounds strange doesn’t it!
Thinking of buying and not sure of the best way forward?
Are you considering making a home or investment purchase? Your not sure where your borrowing capacity stands though?
Bee Finance Savvy is here to help buyers navigate the complex world of lending, and find the home loan that’s right for them.
Not all lenders will have you add your company debts into your personal expenses. However, in some cases, these lenders who do, may still be the better fit for you, depending on your other financial circumstances.
If you’d like an up front, no obligation consultation, why not speak to our savvy broker Desiree. Desiree is here to answer all your questions, and help you on the way to achieving your property goals.
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