Mortgage Applications: A Guide for Aussie Hairdressers

Owning a home is a dream for many, and our scissor-wielding friends in the hairdressing industry are no exception. But when it comes to navigating the world of home loans, some stylists might find themselves tangled in the knots of demonstrating financial stability. Here, we’ll tackle two common concerns Aussie hairdressers face when applying for a home loan:

1. Conquering the “Self-Employed” Enigma

Being your own boss is a badge of honour, but lenders might need some extra reassurance when it comes to self-employed income. Here’s what you need to know:

  • Lenders Love Paper Trails: Gather your tax returns for the past two years (minimum). These are the holy grail documents for proving your income.
  • BAS Statements Speak Volumes: If you’re registered for GST, your Business Activity Statements (BAS) add weight to your application.
  • Bank Statements Tell a Story: Show regular income deposits into your business and personal accounts for the past few months.

2. Tax Deductions: Friend or Foe?

Claiming tax deductions is a smart financial move, but some stylists worry it might lower their borrowing power. Let’s unravel this:

  • Deductions Don’t Disappear: Lenders typically use your taxable income (after deductions) to assess your borrowing capacity.
  • Showcasing Profitability: While deductions might minimize your tax bill, they shouldn’t significantly impact your overall profitability. Focus on demonstrating a healthy profit margin after deductions.

Bonus Tip: Building a good relationship with a broker who understands the nuances of self-employed finances can be a game-changer. They can guide you through the paperwork, prepare a strong application, and negotiate the best rates on your behalf.

So, breathe easy hairdressers! With the right preparation and a little guidance, you can confidently navigate the home loan application process and turn your dream home into a beautiful reality.