If you are self employed, then you might find it a little more difficult to get home loan compared to if you had permanent employment with a regular income. But even if you are self-employed it is not impossible to get a home loan. If you have put in an offer that the seller is likely to accept and if you are likely to get a home loan approved, then you need to be prepared and have all your documents ready before the agreement is signed.
The criteria used by banks to evaluate your bond application may differ slightly between one another, but generally, you will just need to prove that you have a regular income and that about 30% of your average net income can be used for a home loan.
The bank will want proof of your income and profit, which you can get by obtaining a letter from an auditor that proves it. If you are a shareholder in a company, then you will need to obtain a letter from an auditor that confirms your shareholding percentage.
You will also need to provide the bank with your latest bank statements from your personal account. Some banks will ask for 3 months if you have a fixed income and if your income is varied they may ask for as far back as 6 months. Also, you will need to give them the latest bank statements for 6 months for your business account and the last two years of financial records.
The bank may also ask for your latest tax certificate and in some cases, they may ask for the last three years, so it is a good idea to have this on hand if it is asked for.
If you are divorced and part of your regular income includes maintenance so that you are able to qualify for a bond, then you will need to provide a copy of your divorce decree that states it should be included.
If you have lease agreements in place, where the income thereof is included in the income statement, then the rental amount will need to be current. You may also need to provide copies of these agreements.
It may seem like getting all this documentation in place is a pain, but the banks will want to make sure that you have regular and dependable income. Most of the paperwork that you may need is part of regular business and personal accounting, so it shouldn’t be too hard to get everything in place.