Being a self-employed person means that you have the independent job, which can be both good and bad for your income. From one point of view, you can earn as much, as you can – without any limitations, which could exist when we talk about the ordinary 9-to-5 job. From another point of view, nobody guarantees any minimum salary for you. It means that in the case of some critical situation, you can earn nothing.
This principle of ‘any salary that could be’ is important when you want to get a home loan. This type of borrowing is quite huge; it may have any term: from 3 or 5 years to 10 or 15. That’s why a bank should have some guarantees that your salary is high enough for paying all those money. But how can you guarantee that you’ll earn enough, being a self-employed worker?
As Catherine Todd, the Australian loan broker claims, the actual difference between a hired worker and a self-employed business owner is no that big. The documents they should provide the bank with are the same: they should confirm the financial results of the business for the previous 2 (or more) years. Also, a person, who wants to get a home loan, should find some stats or analytics that show the trends of the business, its prospectives for future. This kind of information may be enough if the business is really profitable and successful. In this situation, it may be a good alternative for the fixed salary.