The Self-Employed Buyer's Guide: Securing a Home Loan in Brisbane's Competitive Market

Being self-employed shouldn't prevent you from achieving your homeownership dreams in Brisbane's eastern suburbs. While the lending landscape can seem more challenging for self-employed buyers, understanding the requirements and preparing properly can put you in a strong position to secure the right home loan.

Documentation Requirements for Self-Employed Applicants

Self-employed borrowers face more comprehensive documentation requirements than traditional employees. Here's what you'll typically need:

Tax Returns: Most lenders require two years of complete tax returns, including all schedules and attachments. Some specialist lenders may accept one year with strong supporting documentation.

Business Activity Statements (BAS): Recent quarterly BAS statements demonstrate your business's ongoing performance and GST obligations.

Profit and Loss Statements: Accountant-prepared statements showing your business income and expenses over the past 12-24 months.

Bank Statements: Business and personal bank statements for 3-6 months, showing consistent income deposits and expense patterns.

ABN Registration: Evidence of your Australian Business Number registration and how long you've been operating.

Professional References: Some lenders may request references from your accountant, solicitor, or long-term clients to verify your business operations.

GST Registration: If applicable, evidence of GST registration can support your business legitimacy claims.

How to Present Irregular Income to Lenders

Irregular income is common for self-employed individuals, but lenders need to see consistency and sustainability. Here's how to present your income effectively:

Averaging Method: Most lenders will average your income over two years. Ensure your accountant calculates this figure including all income sources and legitimate add-backs.

Seasonal Variations: If your business has seasonal patterns, provide clear explanations and historical data showing these cycles are normal and predictable.

Growth Trajectory: Demonstrate business growth with year-on-year comparisons. Even modest growth shows sustainability and progression.

Multiple Income Streams: Diversified income sources can actually strengthen your application by showing reduced risk and business stability.

Cash Flow Management: Maintain separate business and personal accounts with clear, regular transfers to demonstrate consistent personal income.

Alternative Lending Options for Complex Income Structures

Traditional banks aren't your only option. Several lenders specialise in self-employed borrowers:

Non-Bank Lenders: These institutions often have more flexible assessment criteria and may accept alternative income verification methods.

Low Doc Loans: While less common post-Royal Commission, some low documentation loans are still available for established businesses with strong deposit positions.

Asset-Based Lending: Some lenders focus more heavily on your asset position and deposit rather than traditional income verification.

Specialist Self-Employed Programs: Certain lenders have developed specific programs for contractors, consultants, and other self-employed professionals.

Bank Statement Lending: Some lenders will assess your income based on bank statement deposits rather than tax returns, particularly useful if your tax returns don't reflect your true cash flow.

Timing Your Application for Best Results

Strategic timing can significantly improve your approval chances:

Post-Tax Return Lodgement: Apply shortly after lodging your tax returns when your financial position is most current and clear.

Business Cycle Considerations: Time your application during your business's stronger periods when bank statements show consistent deposits.

BAS Quarters: Ensure your most recent BAS reflects strong business activity before applying.

Personal Financial Position: Apply when your personal finances are strongest, with minimal personal debt and maximum savings on display.

Market Conditions: Consider broader market conditions and lender appetite. Some periods see more conservative lending, while others may be more favourable.

Working with Accountants to Optimise Your Financial Position

Your accountant is crucial in preparing a successful loan application:

Income Maximisation Strategies: Work with your accountant to legitimately maximise your reportable income through proper add-backs for depreciation, personal use of business assets, and other non-cash expenses.

Business Structure Review: Ensure your business structure supports your borrowing goals. Sometimes restructuring before applying can improve your position.

Tax Planning: Balance tax minimisation with borrowing capacity. Sometimes paying slightly more tax results in significantly better borrowing power.

Documentation Preparation: Have your accountant prepare professional financial statements and income summaries specifically for lending purposes.

Future Planning: Discuss strategies for maintaining and improving your borrowing position for future property purchases or refinancing.

Real Case Studies: Successful Self-Employed Buyers in the Eastern Suburbs

Case Study 1: Marketing Consultant in Coorparoo Sarah, a marketing consultant, struggled initially with major banks due to irregular monthly income. By working with a specialist lender and presenting 18 months of bank statements showing consistent quarterly payments from retainer clients, she secured approval for a $650,000 loan. The key was demonstrating that her "irregular" income was actually predictable when viewed quarterly rather than monthly.

Case Study 2: Tradie Couple in Camp Hill James and Michelle, both tradies with separate ABNs, combined their applications to purchase in Camp Hill.

Their accountant structured their income to reduce income to one party and increase to the other which when their lender applied the ‘averaging over two years method’ to their income individually it caused issues with borrowing capacity. 

We were able to seek the common-sense approach and average their overall income to which they were then able to secure a 90% loan using the First Home Guarantee, despite this initial set-back with their current bank.

Case Study 3: IT Contractor in Norman Park David, an IT contractor working through his company, initially had his application declined due to successive company losses. By restructuring to pay himself a lower salary (increasing his tax liability slightly) and using interim data to support being on track to make a profit he successfully secured a $580,000 loan for a Norman Park renovation project.

Case Study 4: Creative Professional in Holland Park Emma, a graphic designer with both employed and freelance income was finding extremely difficult to secure finance.

We were able to use a mainstream lender to average her total earnings (both employed and self employed earnings) over a two-year period.

This approach allowed her to access mainstream lending products while still benefiting from her additional self-employed earnings in the assessment.

Key Takeaways for Self-Employed Buyers

Success as a self-employed buyer in Brisbane's competitive market requires preparation, patience, and the right professional support. Start preparing your documentation well before you're ready to buy, work closely with your accountant to optimise your financial presentation, and consider working with a mortgage broker who understands the nuances of self-employed lending.

Remember, being self-employed doesn't disqualify you from homeownership in desirable areas like Camp Hill, Norman Park, or elsewhere in Brisbane's eastern suburbs. With the right approach and preparation, you can successfully navigate the lending process and secure your dream home.

The key is understanding that self-employed lending is about demonstrating sustainability and consistency in your income, not just the amount you earn. With proper preparation and professional guidance, your entrepreneurial success can translate into homeownership success.

Please Note: All lending solutions are specific to a client’s personal position and lender policies are subject to change.  The only way to be confident with your finance is to book an appointment with a broker to review your personal situation in line with current policies.