Hey I am thinking of borrowing a small amount (approx 250, 000) for my first investment property, I live at home at the moment and will continue to for a while. I have recently started sub contracting as a carpenter under my own ABN but it has been brought to my attention that usually a bank will not give out loans unless you have had 2 years ish of BAS statements etc. I've looked at low doc loans but am thinking they might be more expensive? What I am wondering is if I can be put under contract by the company I am working for until approx 6 months from now when I will pursue the loan. Get the loan approved, buy the place etc and then change back to working under ABN. Is there any regulations in contract that say there is a certain amount of time until you can do that or any policies regarding the above, would a broker help with this situation? Thanks for all help !
Generally speaking, the less you show, the higher the rate. True that most banks require 2 years financials, some of the majors will consider 1 (most recent) year given the ABN is registered for over 2 years. Low doc will normally require you to have 2 years ABN registration as well. Some specialist products don't, however, as you've noted - rates will be more expensive. I assume by switching to contract, you mean PAYG contract?
Talk to a good broker - some banks may have exceptions to this policy if you are working in the same industry as previously.
As Jason has suggested there are some outliers here that may work for you especially if the deposit is 20 % and the people you are contracting to are the same as your previous PAYG employer - which is common in the construction industry ta rolf
Changed employer funnily enough as he was not giving me enough work as a casual, i would have 20% deposit
Hi Cameron, If you dont have 20% deposit and need to go into LMI territory then you definitely need 2 year financials. On the other hand if youre a PAYG contractor and need to borrow more then 80% you may still be limited to a few banks.
As long as it's not a casual, otherwise you'll need to show 6 months of casual income before you can apply.
2 years financials are kinda stock standard process with some exeptions as per the thread and my question is around the preferance of bank:- Are there any banks that are more attractive for business customers i.e. a couple (with 2 kids) is running a motel and looking to get into property market initially PPOR and later can be an IP. Will it be whichever bank gives the best IR and higher loan amount with product flexibility or there are specific banks that are good for family business?
if the income is similar across both years it wont come down to lenders that are " good for family Business" will simply come down to servicing, and depending on the make up of the income and addbacks and existing liabilities there will be lenders that treat some of these differently from others. ta rolf
