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Can I get a mortgage if I’m self-employed?

As a self-employed person in New Zealand, getting a mortgage can be quite challenging. Banks and other lending institutions typically favour individuals with a regular income and a steady job. However, that doesn't mean it's impossible to secure a mortgage as a self-employed individual, especially with a little help!

Let’s talk about the challenges of getting a mortgage in New Zealand if you're self-employed, and provide specific steps to help you overcome those challenges!

Challenge: Lack of Regular Income
One of the primary challenges that self-employed individuals face when applying for a mortgage is a lack of regular income. Banks and other lenders often require proof of regular income to assess whether you are a suitable candidate for a mortgage. Self-employed individuals typically have an irregular income stream, which can make it challenging to demonstrate your ability to repay a loan.

Solution: Keep Detailed Records of Your Income
To overcome this challenge, it's essential to keep detailed records of your income and expenses. This can include tax returns, bank statements, and other financial statements that demonstrate your ability to manage your finances effectively. You can also provide a projection of future income to give lenders an idea of your expected earnings.

Challenge: Difficulty Proving Creditworthiness
Another challenge that self-employed individuals face is proving their creditworthiness. Banks and other lenders typically rely on credit scores to determine whether an individual is a suitable candidate for a mortgage. However, self-employed individuals often don't have a traditional credit history, which can make it difficult to prove their creditworthiness.

Solution: Build Up Your Credit History
To overcome this challenge, it's essential to build up your credit history by maintaining good credit practices. This can include paying bills on time, keeping credit card balances low, and regularly checking your credit report for errors or inaccuracies. You can also consider taking out a small loan or credit card to build up your credit history.

Challenge: Difficulty Meeting Lender's Requirements
Lenders often have strict requirements when it comes to lending money, and self-employed individuals may find it challenging to meet these requirements. For example, lenders may require a certain level of income, a specific credit score, or a particular debt-to-income ratio.

Solution: Work with a Mortgage Broker
To overcome this challenge, it's beneficial to work with a mortgage broker who can help you navigate the lending process. A mortgage broker can help you find lenders who specialise in lending to self-employed individuals and help you prepare your application to meet the lender's requirements. They can also negotiate on your behalf to help you secure a suitable mortgage.

Getting a mortgage as a self-employed individual in New Zealand can be challenging, but it's not impossible. By keeping detailed records of your income, building up your credit history, and working with a mortgage broker, you can increase your chances of securing a suitable mortgage. With a little persistence and determination, you can achieve your dream of owning your own home!

Disclaimer: This content is not intended to replace advice from your mortgage advisor, and does not take into account your specific financial situation. This is not personalised advice and is factual only. Please do your research and work alongside a mortgage professional to find the best solutions for you. Please get in touch if you’d like specific advice or just want to have a chat!


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