18/19 Income vs. 19/20 Income

Discussion in 'Loans & Mortgage Brokers' started by edp_2019, 7th Jan, 2020.

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  1. edp_2019

    edp_2019 Member

    Joined:
    16th Nov, 2019
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    Location:
    Coolum Beach
    Hi all,

    I started a company in September 2017 and currently myself and my wife manage everything.

    In the early days we didn't pay ourselves much, but our business has grown year on year.

    Starting July 1st 2019 we increased our wages to a point where we earn over $50K more per year (combined) than in previous years, yet our broker is saying that the current financial year cannot be assessed because it is not complete.

    I feel if we are only assessed on the early years it's not a true reflection of our current income and will have a massive impact on our borrowing power (we want to borrow approx $550K and those early figures are too low for that).

    For example, our gross taxable income history:

    2017/2018 = $68K combined
    2018/2019 = $84K combined
    2019/2020 = $69K combined so far (6 Months only) on track for $138K end of financial year.

    Will lenders take anything into consideration for this financial year?

    Or should I wait until July 1st so our figures are stronger?

    Thanks!
     
  2. Simon Moore

    Simon Moore Residential & Commercial Mortgage Broker Business Member

    Joined:
    4th Mar, 2016
    Posts:
    555
    Location:
    Level 2 287 Collins St Melbourne VIC 3000
    What they are saying is generally correct, unless you are happy with a 'low doc' loan which has a higher interest rate. There is one potential loophole, but the LVR needs to be <70%, and most people don't have that type of deposit.

    The reason is you have no 'proof' (in the way the bank accepts it) of that income. They want to see tax returns, and you won't have that until August at the earliest.

    Sorry to be the bearer of bad news :(
     
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  3. kierank

    kierank Well-Known Member

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    Gold Coast
    @edp_2019, what profit did the company declare each year?
     
  4. izzy16

    izzy16 Well-Known Member

    Joined:
    12th Oct, 2016
    Posts:
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    Location:
    Sydney
    Not much. $5K profit 17/18 and $10K profit 18/19.
     
  5. kierank

    kierank Well-Known Member

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    20th Jan, 2016
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    Location:
    Gold Coast
    I am confused - you aren’t the OP
     
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