Income Verification for Australian Hairdressers

Turning your dream home into reality is an exciting step! But for self-employed hairdressers, or those renting a chair at a salon, income verification for a home loan can raise questions. Here’s how to navigate the process:

Understanding Fluctuating Income:

Hairstyling is a dynamic profession with income that can ebb and flow. This might make you wonder how lenders assess your ability to repay a home loan.

The Verification Process:

Lenders typically request tax returns for the past two years as a primary source of income verification. For self-employed hairdressers, this includes your Activity Statements (AS).

Factoring in Tips and Commissions:

Good news! Many lenders consider tips and commissions when assessing income. Be sure to declare these on your tax return to ensure they’re included.

Strengthening Your Application:

  • Consistent Income: Demonstrate a consistent income pattern over the past two years.
  • Savings History: A healthy savings account shows responsible financial management.
  • Strong Credit Score: Maintain a good credit score to improve your borrowing power.
  • Documentation: Keep detailed records of income and expenses, including receipts for booth rent, salon supplies, and continuing education.

Seeking Help:

  • Talk to Your Accountant: Discuss tax strategies that can help solidify your income picture for lenders.
  • Mortgage Broker: A mortgage broker can guide you through the loan application process and connect you with lenders who understand the specificities of self-employed income.

Owning a home is a major goal, and with careful planning, Australian hairdressers can achieve it! By understanding income verification and taking steps to strengthen your application, you’ll be well on your way to turning your dream into reality.