Being self employed means you are your own boss and many of us struggle to access finance either because of the paperwork needed, it takes long for approvals or we can only see a lender at times that suit us to accommodate our busy erratic work lives.
RAMS has been awarded Best Self Employed Lender 2017 & 2018 and aim to offer flexible credit terms along with a smaller set of paperwork, quick assessment and response times, and franchises that are open to accommodate the hours small business owners work.
We interviewed Rams to find out various Do’s & Don’ts, pitfalls, challenges and solutions available for self employed borrowed looking for home loans.
Being self-employed and getting a home loan is definitely a daunting task. As the best self-employed lender for 2017 & 2018, how do you help small businesses and entrepreneurs?
- Being self-employed can mean fluctuations in your income. RAMS understands this. After all, our RAMS Franchise Principals are small business owners themselves.
- With a simple application process and minimal paperwork, your RAMS lender can meet to discuss your needs 7 days a week, even before or after hours. This means you can spend more time looking after your customers.
- If you’re self-employed and in the market for a home loan, RAMS has several home loans that don’t require the usual financial statements or tax returns.
Please tell us what benefits RAMS can offer small businesses and entrepreneurs.
- RAMS offers three types of lending to self-employed customers – a Self Employed Home Loan, a Self-Employed Fixed Rate Loan and a Self-Employed Line of Credit.
- Depending on the type of loan and your circumstances, benefits can include redraw with no minimums and no redraw fee; for fixed loans a wide range of fixed rate periods – 1, 2, 3, 4, 5 and 10 year period; for variable loans you could save on fees and receive a discounted variable interest rate with our Value Advantage Package – conditions apply.
How long has RAMS been helping small businesses and entrepreneurs get home loans?
- Since 1995, RAMS has been helping Australians realise the ‘great Australian dream’ of home ownership by providing affordable, simple yet flexible home loans.
- RAMS also offers industry leading savings and deposit accounts along with a range of insurance products to meet your needs.
What challenges do you mostly come across for self-employed borrowers and how do we increase our chances of approval?
- Some self-employed customers may unfortunately struggle to access finance because they don’t have their financial statements or tax return ready at the time of application. RAMS is a specialist self-employed lender that aims to offer flexible credit terms along with a smaller set of paperwork, quick assessment and response times, and franchises that are open early, late and on weekends to accommodate the hours small business owners work.
What documentation would borrowers need in order to get a home loan?
- Whether RAMS customers work for an employer or are self-employed, depending on their circumstances and the home loan they have applied for, they will generally need to supply the following:
- Completed and signed RAMS Standard Application Form
- 100 Point Check AML Customer Identification Checklist (with accompanying identification) per applicant
- First Home Owner Grant application (if you’re a first home buyer)
- Signed copy of Contract of Sale (required for purchase only)
- 6 Months Home Loan Statements (required for refinance only)
- Rates Notice for existing property used as security (required for refinance/equity releases only)
- Copy of last 3 months’ loan statements for any loan to be paid out (required for loan consolidation only)
- Evidence of income – most recent payslip or letter from employer detailing conditions and most recent group certificate.
What about business owners who have an existing home loan. Is there anything that RAMS can help them with additional loans using their equity perhaps?
- Each business owners’ needs are unique and their individual circumstances must be taken into account. Customers can arrange to see a home lending specialist at their local RAMS Home Loans Centre or call 13 RAMs, that’s 13 7267 to arrange for a RAMS Home Loans Specialist to call.
What are the pitfalls that self-employed borrowers need to look out for when looking for loans?
- Paperwork – can be a hassle particularly when you have a business to run. However, a self-employed home loan allows for the provision of documentation to suit a small business’ unique needs such as your business activity statement, income declaration and registration for GST.
- Upfront costs – Most lenders will require you to have a significant deposit and may even ask you to pay lenders mortgage insurance if you’re borrowing more than 60% of the property value. Generally, you will need to have saved a minimum of 20% of the property value. There are also plenty of other costs that should be factored in, such as stamp duty, home loan application fees, ongoing fees and repayments and council rates etc.
- It’s also important to remember that interest rates are at record lows at the moment, but you should plan ahead in the case of a rate hike in the future.
What are the do’s and don’ts of self-employed home loans?
- DO try and keep all your documentation and paperwork in order to make the application process much easier.
- DO consider your current financial situation and think about what you can realistically afford with your home loan.
- DO seek professional financial advice if you think you need some help with your financial planning.
- DON’T forget to factor in other added costs such as Stamp Duty and Conveyancing Fees along with the purchase price of your home, so you’re not left with a nasty surprise once the home loan settles.
- DON’T assume that it will be hard to apply for a home loan just because you’re self-employed – your RAMS local home lender is more than happy to help where they can.
Who can we contact in Perth / Western Australia for an initial confidential conversation?
Customers can arrange to see a home lending specialist at their local RAMS Home Loans Centre or call 13 RAMs, that’s 13 7267, to arrange for a RAMS Home Loans Specialist to call.
For further information and to contact a specialist in Perth, please visit: Rams Can Help You!