How Shore Financial helped a self-employed couple buy their first home
“One of the myths of being self-employed is that it’s easy to get a loan. We didn’t have a clue how to start it or what to do.” – Caroline
Meet Caroline and Alaa: small business owners
Caroline and Alaa are hardworking partners in every sense. They live together and have been running the same business for ten years. They run both a supermarket and a petrol station. They’re up all night doing the books and trying to juggle the demands of running two intense retail businesses. They owned one property but then had to change suburbs for their work.
For a long time, they rented while they kept working. But it wasn’t enough. They wanted their own home.
Caroline and Alaa thought getting a mortgage would be simple, but it was a far trickier journey than they’d imagined.
Luckily for them, Shore Financial was about to come to their rescue. Shore Financial’s huge network of lenders and high level of customer service would make a massive difference.
Dana Fraser, Senior Credit Advisor from Shore Financial, says: “I sat down with them and we went through their financials from the previous year and we worked out areas that they could improve on in order to maximise their income.”
Their first step on a rewarding journey was about to begin.
Having the right broker
Caroline didn’t realise how important it was to get the right mortgage broker until their first bad experience with a local broker they’d used:
“We tried to get a loan. For some reason he didn’t do things properly,” says Caroline. “We cut it off and said, ‘You don’t know what you’re doing.’”
With her and her partner’s ten years of strong business success, they should have been a shoo-in for a loan. They had a property and two flourishing businesses. Instead, they were finding dealing with the banks like hitting a brick wall. They simply couldn’t get a mortgage for the house and didn’t know where to start.
So Caroline looked around for other options.
Enter Dana Fraser
Luckily Caroline heard about Dana Fraser, Senior Credit Advisor, from Shore Financial after a strong recommendation from her local real estate agency in Windsor.
“They said she’s smart and she knows what she’s doing.”
Caroline met with Dana and was instantly impressed.
“When you first meet Dana, you feel like you’ve already known her for a while. She’s very friendly. Her advice is spot on,” says Caroline.
Dana was upfront with them.
“I told them, ‘With your financials as they are, you won’t get a loan. But here’s what we can do to get there. There is a path.’”
Caroline was really struck by Dana’s confidence and her precision. It was like having a huge weight lifted off her shoulders.
“Her calculations were spot on. She told us from the beginning, ‘This is how much you’re going to need; this is what the banks will give you.’ She gave us all the options.”
The right path to property
What had seemed like fighting through an impossibly thick jungle of mortgage choices was suddenly made easy, once Dana came on board.
Caroline and her partner had been struggling to find money and ways to get a loan. Dana showed them it was simpler than they had thought.
She came up with some easy solutions to help their credit and service levels:
“Even things I didn’t think about like cancelling my credit card,” says Caroline. “I had a credit card with ANZ, which we cancelled, another credit card which we reduced. I’ve got all my business accounts with ANZ. It was really silly that ANZ didn’t help me.” Dana said, ‘Do you need a mortgage overdraft?’ I said, ‘No’, she said, ‘OK, we can cut them down.’”
Dana helped them find other ways to increase their finance options Caroline says,, “Dana suggested a refinance which we didn’t think of. And she got us another $85 000 in our equity. And we could use that now if we wanted. Refinancing was a great idea..”
The journey to approval
With Dana helping them every step of the way, the journey was very painless and straightforward.
This was because Dana was meticulous in finding the right strategy that worked for Caroline and making sure they had a checklist of every home loan document they’d need.
Being self-employed means a different approach
Caroline and her partner had a successful business that they’d been running for ten years. Yet neither the banks nor their previous broker made it easy for them.
“We didn’t have a clue how to start and how to do it. We had this idea of, ‘Okay, you’re self-employed it’s really hard and tough.’ It should be the other way round,” says Caroline. “If you’re self-employed for over ten years, it’s really good, you know. You can get a job and lose a job tomorrow but if you’re self-employed and you’ve settled yourself for the last ten years, it should be much easier.”
Dana was always responsive and navigated them every step of the way, dealing with all the paperwork and meeting them whenever she was needed.
“Dana is very caring. Whenever I rang her, she would answer. When I emailed, she would ring me back.”
Most self-employed traders or businesses often try to reduce their income in order to pay less tax. But this is a disadvantage when trying to get loan approval, so Dana helped them set a precise income target.
Looking to the future
Caroline and her partner are no longer renting and have their perfect home close to their business. It’s made Caroline realise that being self-employed is not a dirty word when it comes to getting a loan!
Dana also helped them structure their property portfolio the best way possible so that it was advantageous to their loan product. And they can easily meet their mortgage repayments.
Key takeaways for self-employed
Caroline and Alaa’s story is not unusual and we’ve helped many small business owners and self-employed people achieve their property dreams over the years.
Some key things to consider:
- Being self-employed doesn’t make you different to any other potential borrower.
- Income verification can be difficult. In other words, how do you prove how much you’re earning? One option sometimes used by businesses is a lo doc loan, where in some cases your accountant verifies your income so you need fewer supporting documents. However, keep in mind that the interest rate may be higher.
- The other classic problem for businesses and self-employed traders is that they are usually trying to reduce their taxable income as much as possible. This works out really well when you’re trying to not pay too much tax, but when you’re applying for a loan, your net income stream doesn’t look as good as it could.
- Finally, most self-employed people are really busy and time poor. Shore Financial is happy to come out and meet you at your business or home to make the most of your precious time.
You can find out more about Shore Financial’s process here or discover what kind of home loan will work best for you. If you run a business like Caroline and Alaa, you may want to find out how commercial loans work.