What’s Changed In 2020 COVID-19 For The Self Employed Borrowers?
While the rules and regulations haven’t changed significantly for self employed borrowers wanting to borrow a home loan, COVID-19 has certainly made it a little trickier.
Lenders are requesting additional income documentation to ensure your business hasn’t been massively impacted by the pandemic.
Some lenders have also placed temporary bans on certain industries such as retail, tourism, airlines, hospitality and entertainment. However, if you can show consistent income your application may still be approved.
The main impact to the self employed borrowing due to COVID-19 is that some lenders are only allowing loan values of up to 80 percent of the property value.
How Much Can I Borrow As Self Employed?
When it comes to the amount you can borrow, self employed borrower can usually loan up to 90 per cent of their property value. Although some lenders only allow 80 per cent now due to COVID-19 impacts.
Most loans are assessed on a case by case basis, so it pays to talk to your mortgage broker to work out how much you could borrow.
What Documentation Will I Need?
- Two years of financial statements including personal returns, company returns and business profit and loss statements
- A Business Activity Statement (BAS) with periods from the most recent financial statements through to application date.
- Business bank statements
- Maybe a letter from your accountant projecting your income for the next 12 months
- A statement to outline the effect of COVID-19 on your business
Are Low Doc Options Still Available For Self Employed Borrowers?
Yes, low doc home loan options are open still for self employed borrowers.
How To Improve Chances of Approval?
Lenders will ask you more questions on the impact of the coronavirus pandemic on your business.
By applying through a Mortgage Broker Brisbane, they will be able to navigate these questions for you and increase your chances of submitting the correct information and documentation. As it is often how a deal is presented that makes all the difference.
Our self employed home loan brokers at North Brisbane Home Loans are up-to-date with the latest lending policy changes for self employed borrowers due to COVID-19.