My Loan Got Rejected – I’m self employed

by Sep 20, 2016First Home Buyers, Mortgages, Non-Bank Lending, Property investment

self employed mortgage Auckland

If you are self employed, Banks often treat you like you’re unemployed. You’re making a regular income, have a range of stable clients and earn more than employees offering the same service as you. Yet Banks don’t recognise the stability and value you can provide when making mortgage repayments. Instead they simply reject your home loan. If that’s happened to you, you may feel frustrated – and rightly so. But the Banks not approving your home loan application shouldn’t stop you from entering the property market. If you’re self-employed and wanting to take advantage of the projected growth in property prices, you can still get a home loan outside of the Banks.

Why did the bank reject your loan application? 

Banks often reject self-employed workers because they haven’t been trading long enough or they are unable to provide sufficient financial information. Banks are great at analysing the macroeconomic environment and setting up rules to treat masses of people that fit their specific requirements. Banks can offer excellent services to the masses. But when it comes to looking at personal situations, especially those of self-employed people, Banks don’t pay attention. As a result, they miss out on providing qualified individuals with healthy deposits and stable incomes with home loans.

How else can you get a loan? 

Previously, when self-employed business owners wanted an alternative to the Banks, they would have to get a short-term finance company loan – which charged over 10% interest. Such a high interest rate would make very few property investments worthwhile. Thankfully, there is an alternative.

iLender offers lo doc loans – which are ideal for self-employed people. Lo doc loans – low document loans – are loan agreements that allow you to take out a home loan, or refinance a current home loan, without having lots of financial documents. Responsible lending means you still have to show the ability to pay so bank statements will be needed but not Financial Accounts.

Do you qualify? 

It is significantly easier to be approved by iLender when you own your own business, compared to the Banks. Here are a few details to determine if it’s the mortgage solution for you:

  • Minimum trading period of 6 months
  • Income declared must be within industry norms
  • Maximum 80% loan-to-value, subject to property type and location

The opportunities a lo doc loan brings 

Getting the home loan that fits your unique situation allows you to enter the property market. The New Zealand market is currently booming. In particular, Wellington, Hamilton and Tauranga are areas that are set for growth in the coming few years. With the high growth expected in New Zealand’s property market, there are substantial capital gains to be made for people willing to enter the market now.

iLender is committed to setting people up with the right mortgage for them. If a loan doesn’t fit your circumstance, we have plenty of other options available. We offer mortgages with lower deposits required than Banks, interest only mortgage loans and first home mortgages. At 80% loan to value you can still get into the rental market without proving your own income by way of Financial Accounts.

About iLender

At iLender we put your best interests first and not the Bank – our advice is unbiased as all Lenders who we do business with pay about the same in commissions.

Although we are Auckland based Mortgage Brokers, we help customers everywhere in New Zealand and overseas with buying property in New Zealand, as we are very much about online and giving advice here and now!

What benefits are there in having an ‘Interest Only’ Mortgage

  With mortgage interest rates changing and considering whether to fix your mortgage interest rate, you might also be wondering if an ‘interest only’ mortgage might be a good option. An ‘interest only’ mortgage can provide temporary relief, but it’s important to...

Let’s talk about ‘Break Fees’

  Break fees are charged by lenders when a fixed term loan is repaid early and the lender can only ‘on lend’ that money to someone else, at a lower rate. This has not been an issue over the last couple of years of course but now, as rates fall and will fall...

Property Investing 101: The ‘One Bank’ Trap

  When it comes to investing in properties, many people find themselves faced with a common question: Should you secure multiple properties with the same bank or spread your investments across different lenders? This decision is not to be taken lightly, as it can...

A lot of change Winter 2024

  Lending is seeing a lot of changes currently so here's a breakdown of what to expect. Loan to Values (LVR's) Currently a bank can only lend up to 25% of its money to owner occupiers with less than a 20% deposit. As of July 1st this rises to 20% so expect more...

Best mortgage rates, 10% deposit owner occupied and 20% rental purchase, self employed with no financials and help for those with bad credit or arrears.

Hundreds of reviews on TradeMe and Google makes us your ‘Number 1’ choice.

Call 0800 536 337