Mortgage self employed

[Polkey]

Hi All, looks like im going to be able to start work self employed, hopefully.
My question is, can any one tell me how many months/ years accounts i would need to have before applying for a mortgage? I know the benefits of being my own boss will be worth waiting a bit longer to buy but wanted to check it wasn't to long.
Thanks everyone,

John.

[gazza]

hi john

you only need your ABN (australian Buisness Number) for 1 day, then you can apply for a mortgage, it will be a Low Doc mortgage which will cost you slightly more. im in the process myself but by supplying all my work references and tax receipts from the UK im hoping they will give me a normal mortgage.
im no expert and im sure someone will correct me if wrong.

hope it helps gazza

[Polkey]

Cheers Gazza,

I imagined it to be a lot longer than that, i know in the UK they have reduced it over the years but thats great.We don't intend on buying foe at least 12 months anyway.
Im used to paying more for being self employed, they love to clobber you for more but you learn to expect it and i think its a small price to pay to work for yourself, it has far greater rewards.
All the best.

[BullcreekBob]

Originally Posted by Polkey

My question is, can any one tell me how many months/ years accounts i would need to have before applying for a mortgage?

G'day John

It largely depends on the size of your deposit.

If you want to borrow less than 60% of the value of a property, ie your deposit is at least 40% and you can also cover the fees then you can indeed get a no-doc mortgage pretty easily. Also some of these lenders are happy for you to have been in business here for only 1 day. There are restrictions on the types of business and you often need to show that you've been involved in a similar industry for a number of years. In short, as long as you're something that's readily employable and you know what you're doing, you can get a loan pretty quickly. By taking a low-doc or no-doc loan, you will be paying a premium in your interest rate, around 1% extra is not uncommon.

If you want to borrow between 60% and 80% of the property's value things become a bit tougher, some lender will want 3-6 months in business, some more than a year and you'll probably need to produce more documentation; i.e. a low-doc loan rather than a no-doc one.

If you want to borrow more than 80% as a self employed person, you will not get a low-doc or no-doc loan, you'll need to be fully verified by both the bank and the company providing the Lenders Mortgage Insurance. You will generally need at least two years worth of trading figures.

More than a 95% loan and self employed is very difficult and will usually involve all sorts of extra gaurantors, a letter from your parents and a blessing from the pope.