01 Jul 2021

Can I Get a Mortgage with Less than 2 Years Self-Employment?

Stamp Duty: Can I Use My Mortgage to Pay it Off and the House?

Most lenders require you to be self-employed for at least two to three years in order to be approved for a home loan. However, some lenders will consider your application if you’ve been self-employed for less than two years. 


How long do I need to be self-employed to receive a loan?

There are very few lenders who will approve your home loan if you’ve been self-employed for less than a year. Most lenders won’t lend to you if you don’t have tax returns to prove your income and aren’t established in your business. You have a better chance of being approved if you’ve been self-employed between one and two years, especially if you are in the same line of work as you were before. For example, a contractor who worked in the construction business for a few years before starting his own company. The reason for this is because if your business fails, you can go back to working in the industry you were in before. 


How will lenders calculate my income?

Unfortunately, there is no easy way to determine how lenders will calculate your self-employed income. Lenders will interpret your tax returns differently. They may also look at your skills, industry experience, and risk profile to determine how they will assess your income. For example, some may use your lowest income over the last two years; others may use your most recent tax return. Still, others may calculate an average. 


If you have been self-employed for less than two years and are applying for a home loan, contact Mortgage House. We have low-doc home loans available that offer competitive interest rates compared to traditional full-doc home loans. 

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