Income Documents for Self-Employed Applicants
When you are self-employed, lenders typically require more documentation to verify your income compared to salaried employees. Common documents include:
- BAS (Business Activity Statement) reports – these show your business turnover and are often used by lenders to verify income over a period.
- Accountant letter – a letter from your accountant confirming your financial position and income can be a helpful supporting document.
- Bank statements – these help demonstrate that the income you report actually flows through your accounts.
How Lenders Assess Repayment Capacity
Lenders assess your ability to repay a home loan by reviewing the income evidence you provide. They typically look at:
- The consistency and reliability of your income over time.
- The documentation’s completeness and whether it matches the lender’s requirements.
- Your overall financial situation, including existing debts and expenses.
Each lender has its own criteria, and what one accepts may not be enough for another. A mortgage broker can help you understand which documents a particular lender expects and how they assess self-employed applicants.