Securing finance as a self-employed borrower can sometimes feel more complicated than it does for salaried employees, but with the right preparation, it’s absolutely achievable. While there may be a few additional steps involved, having your paperwork organised and understanding your options can place you in a much stronger position when applying for a home loan. 

One of the biggest misconceptions is that you must have two years of financials before a lender will even consider your application. In reality, some specialist lenders may assess applications with as little as 6 to 12 months of ABN history, depending on your overall financial position. More on that below.

Here’s a closer look at some of the home loan options that may be available to self-employed borrowers. 

Full documentation (Full Doc) loans 

A full doc loan is the more traditional type of mortgage and may suit self-employed borrowers with stable, well-documented income and up-to-date financial records. These loans often come with more competitive interest rates compared to alternative documentation options. 

To apply, lenders will generally request:  

• One to two years of personal and business tax returns  
• Notices of Assessment  
• Financial statements, including profit and loss statements and balance sheets  
• In some cases, payslips may also be accepted if you’re a company director paying yourself a salary  

Alternative documentation (Alt Doc) loans 

Alt doc loans are designed for self-employed borrowers, freelancers and business owners who may not have the standard paperwork required for a traditional home loan. 

Instead of tax returns, some lenders may accept: 

• Letters from your accountant  
• Business Activity Statements (BAS)  
• Business bank statements  

Because these loans can present a higher risk to lenders, they often come with higher interest rates and fees than full doc loans. However, they can provide a valuable pathway into the property market for borrowers who don’t meet standard documentation requirements. 

Some lenders may also review or reduce rates later on once full financial documentation becomes available. 

What if you’ve been in business for less than two years? 

Many major banks prefer borrowers to have at least two years of ABN history, but that’s not always the full story. A number of specialist and non-bank lenders may consider applications with 12 months and in some cases even 6 months, of ABN history. 

Approval will usually depend on factors such as: 

• The strength of your deposit  
• Your credit history  
• The consistency of your business income  

This is where working with an experienced Mortgage Broker can make a real difference. Understanding which lenders are open to newer businesses and how to present your application effectively, may improve your chances of approval. 

Ways to strengthen your application 

Get your financial records organised 
Up-to-date and accurate financial records help make the application process smoother and give lenders a clearer understanding of your income position. If your records are overdue or incomplete, it’s worth addressing that before applying. 

Separate business and personal finances 
Keeping business and personal transactions separate makes it easier for lenders to assess your income and cash flow. Clean, easy-to-read bank statements can work in your favour during the assessment process. 

Build your deposit 
A larger deposit can help reduce the lender’s risk and may improve how your application is assessed, depending on the lender’s criteria. 

Review your existing debts 
Reducing debts before applying may strengthen your borrowing profile, although this will depend on your individual circumstances and credit history. It’s worth discussing your options before making any major financial changes. 

Seek professional guidance 
Navigating the lending process as a self-employed borrower can feel overwhelming at times, which is why having the right support matters. A Mortgage Broker experienced in self-employed lending can help identify suitable lenders, explain your options and guide you through the application process. 

We can help you understand your borrowing capacity, prepare the required documentation and identify lenders that may suit your financial situation and goals. 

Let’s chat today. 🏡