Buying property when you’re self-employed

Buying property when you’re self-employed

03 Aug 2020

To be self-employed requires drive and determination - skills that you could also employ to make a success of your home loan application when you decide to buy property.

Being self-employed doesn't mean having to give up on the dream of owning your own home - on the contrary, it means making that dream come true! The long-held idea that it's difficult to buy property when you're self-employed, isn't really true anymore. Even when you're not permanently employed, and don't have a regular, fixed income, it's possible to submit a successful home loan application. And you could improve your chances by using a bond originator.

What a bond originator can do for you

An expert bond originator, like BetterBond, will apply to multiple banks on your behalf, including your own, and all you'll need to do is fill out just a single application. You stand the best possible chance when using BetterBond because of long-standing relationships with all the major financial institutions and a clear understanding of what they look for mean your application will be presented in the most favourable light. You do one set of paperwork and we'll take care of the rest. Best of all, it's completely free.

Five ways to prepare

If you're self-employed, there are at least a handful of things you can do to put together a successful home loan application. The idea is to show that you have a proven history of managing your finances responsibly - making the argument that you're worth partnering with from the banks' point of view.

  1. Make sure your tax and financial statements are in order and up to date.
  2. Check your credit record - you're entitled to one free check per year without it affecting your credit profile.
  3. Ideally, you should keep your personal and business income and expenses separate. Banks will look closely at affordability and it's best to present them with the clearest possible picture.
  4. Let BetterBond run you through the documents and application to make sure you stand a better chance of success once you've found a place you want to buy.
  5. Save as much as you can towards a deposit.

The documents you'll need

These are some of the most important documents you'll need to get together as part of your application:

  1. The last two years' set of financials. (If older than six months, you'll need up-to-date signed management accounts.)
  2. An auditor's letter stating your income, and the expenses paid for by the business.
  3. Signed personal statement of assets and liabilities, and personal income vs expenses.
  4. Personal and business bank statements for the latest three months.
  5. Latest IT34 from SARS.

It might be slightly more cumbersome for someone who's self-employed to apply for a home loan, but BetterBond is here to help you through the whole process. If you have what it takes to make a success of your business, it's highly likely you'll be able to buy property successfully. The banks will recognise that - they are, after all, also businesses looking to partner with other businesses!

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