In the last few years, more than one million Australians have ditched their 9-to-5 job for the freedom of the gig economy and picking up freelancing jobs – from driving an Uber to developing websites. However, the life of a freelancer is not as easy as it seems to us. They have to face several challenges, including owning a home. It is because lenders likely don't trust individuals who have an uncertain income source. If your profession also comes under freelancing, you don't need to worry. Here's how to own a home in Australia.
Options For Getting a Home Loan as Freelancer
- Standard Personal Loan: Lenders often don't want to take the risk by providing loans to self-employed or freelancers. However, you can choose a secured loan with a standard personal loan by providing security through an asset like a car, house, or cash deposit. Whereas with an unsecured loan, lenders have a high risk, so they provide it at higher interest rates.
- Low Document Loan: You don't need to provide extensive documents through low doc home loans. However, because of the higher risk to the lenders, borrowers need to pay higher interest to the lender compared to regular loans.
Steps to get a Home Loan as a Freelancer
Here are the steps that increase your chances of home loan approval as a freelancer.
Maintain credit record
Your credit score is one of the important factors in determining whether you're eligible to get a home loan or not. Therefore, it is good to check the credit score beforehand to know whether your credit score comes under an ideal credit score. If you have a bad credit rating, consult the best home loan broker, he will provide ways to improve it.
Prepare the amount for the deposit
Whether you choose a regular loan or low doc home loans in Australia, you must prepare the deposit amount. For a regular type loan, a borrower has to pay 10% of the home price., But for a freelancer like you, the interest rate is up to 20%. Usually, a higher deposit amount compensates for the risk faced by lenders, which attach with a freelancer status.
Prepare Basic Paperwork
Along with some personal information, a freelancer may also need to provide some additional paperwork, these are:
- Last six months bank statements.
- Two years income statements and balance sheets.
- ABN and GST registration date.
- Last 2-3 years tax returns.
Your Finance Adviser – Trusted Finance Advising company Australia
We have a skilled team of mortgage brokers who work dedicatedly to provide valuable financial advice to our clients and help them attaining their dream of owning a house.
Speak with Mr. Vishav Atam Swaroop, our trusted home loan mortgage broker Baulkham hills who can help you reach your financial goals.
When a business doesn’t fall into the category of occupying a loan or simply doesn’t want the struggle of preparing such extensive documentation, then don’t despair.
There is a popular alternative to go for: Low doc business loans.
A low doc business loans Australia is easily accessible finance for most developing businesses in Australia, including start-ups, small organisations, or self-employed individuals or have less chance of getting financial support from leading banks.
