How to Choose a Mortgage Broker When You’re Self-Employed
If you're self-employed and looking for a mortgage broker, the right question isn't simply whether they can find you a home loan. It's whether they understand how lenders are likely to look at your income, business and financial position.
Self-employed borrowers can have perfectly healthy incomes and businesses while still looking quite different on paper from someone earning a regular salary.
That's where choosing a broker who regularly works with self-employed borrowers can matter.
Look for someone who takes the time to understand how your income is earned, what financial information is available and how different lenders may assess your circumstances. They should be able to explain the options clearly rather than trying to squeeze every self-employed borrower into the same lending approach.
Self-employed income isn't always straightforward on paper
If you're an employee, assessing income can sometimes be relatively straightforward. When you run a business, there can be more moving parts for a lender to understand.
Income can change
Business income may vary from one financial year to another, which can affect how a lender assesses what is sustainable.
Business structures differ
Sole traders, companies, partnerships and trusts can all present income differently when it comes to a home loan application.
Lenders can assess things differently
The same set of financials doesn't necessarily produce the same lending outcome with every lender.
What should you look for in a self-employed mortgage broker?
You don't necessarily need someone with a special job title. What matters is whether the broker understands self-employed lending and can explain how your particular circumstances may be viewed.
They ask how your business actually works
A useful conversation should go beyond asking for your annual income. Your broker should want to understand how long you've been trading, how the business is structured, how you're paid and whether anything has materially changed.
They understand that lender policies aren't all the same
Different lenders can have different approaches to self-employed income, financial history and supporting documents.
A broker should be looking at how your circumstances fit the available lending options rather than simply starting with one bank.
They can explain the numbers in plain English
You shouldn't leave the conversation more confused than when you started. A good broker should be able to explain what a lender is likely to look at, where potential issues may arise and what information may be needed next.
They don't make promises before understanding your position
Be cautious of anyone promising an approval or a particular borrowing amount without properly understanding your financial position.
Self-employed applications can require more investigation upfront. That's not necessarily a bad thing. It can help identify potential issues before an application reaches a lender.
They look at the loan in the context of what you're trying to do
Getting approved isn't the only objective. The loan structure, repayments and flexibility should also make sense for what you're trying to achieve, whether that's buying a home, refinancing or purchasing an investment property.
Questions worth asking a mortgage broker
You don't need to understand every lending policy yourself. But a few good questions can tell you a lot about whether the broker understands self-employed lending.
- Do you regularly work with self-employed borrowers?
- How are lenders likely to assess my income?
- Does it matter how long I've been self-employed?
- What financial documents are you likely to need from me?
- Will different lenders assess my financials differently?
- Is there anything in my circumstances we should address before applying?
- What happens if my latest financial year looks different from the year before?
What should you have ready?
You don't necessarily need to arrive at your first conversation with a perfectly organised folder containing every document you've ever produced.
But having a basic picture of your personal and business finances can make the conversation much more useful.
The exact documents required will depend on your circumstances and the lender being considered. Martin can let you know what's actually relevant once he understands your position.
A useful starting point
- How long you've been self-employed
- Your business structure
- Recent personal and business income
- Recent tax returns or financial statements, if available
- Existing loans and financial commitments
- Your deposit or available equity
- What you're hoping to buy or refinance
Does your mortgage broker need to be local?
Not necessarily. Much of the home loan process can now be handled by phone, email and video, which means you don't always need a broker around the corner from you.
What matters more is whether the broker understands your circumstances, communicates clearly and can help you work through the lending options available to you.
Gold Coast based, helping borrowers across Australia
Martin is based on the Gold Coast, but The Mortgage People works with clients across Australia. So if you're self-employed in Sydney, Melbourne, Brisbane or elsewhere, you can still work directly with Martin throughout the process.
Not every self-employed home loan should be approached the same way
Self-employed doesn't automatically mean difficult, and it doesn't automatically mean you need a specialised loan product. Your actual financial position should drive the conversation.
Being pushed towards one lender immediately
Your circumstances should be understood before deciding which lender or lending approach is worth considering.
Being told self-employed automatically means higher rates
Being self-employed on its own doesn't determine the rate or type of home loan available to you.
Focusing only on how much you can borrow
Borrowing capacity matters, but repayments, loan structure and what you're comfortable taking on matter too.
Submitting before the numbers are understood
It can be worth identifying how your income and financials are likely to be assessed before rushing into an application.
Start with your situation, not a loan product
If you're self-employed, the first step doesn't have to be choosing a lender or working out which home loan looks best online.
It can simply be understanding how your financial position is likely to be viewed and what your realistic options look like.
You can also read more about self-employed home loans and how Martin approaches them.
Martin has more than 20 years of experience across banking and financial services in Australia and the UK.
You'll deal directly with him, so you can explain how your business and income actually work rather than feeling like you're trying to fit yourself into a generic form.
Have a conversation before you start guessing what a lender will say
Whether you're buying, refinancing or investing, Martin can look at how your income is structured, talk through what lenders may consider and help you understand the options available to you.
Talk to Martin about your situation →