How Is Self-Employed Income Assessed by Lenders?
For self-employed applicants, lenders typically look at two financial years of income as the most normalised way to assess earnings. While this is the standard, it isn't always the reality for every applicant, and many people only have one year of financials completed.
In some cases, one year of financials can still be enough, depending on the lender and the LVR of the property. If you're sitting at 80% LVR and outside LMI territory, meaning no second form of approval is required, certain lenders may accept a single year of financials.
There are also additional conditions that can come into play, such as having an ABN that has been active for at least 18 months. Some lenders may even consider applications under this timeframe. Ultimately, it all comes down to the specific deal and matching your circumstances with the right lender.
