Lenders who will accept a single year's tax return?

I'm planning for an equity release in the near future and might need to change lenders for this to occur. My most recent tax return is substantially higher than the previous year's tax return. It would therefore be more beneficial to find a lender who accepts just 1 tax return, instead of the more commonly required 2 years. Can anybody share knowledge regarding a lender / s who will accept 1 tax return? Thanks.

 

Yes there are. Best to see a broker

 

Hey there,

ANZ and CBA will accept 1 year financials if sub 80%.

Cheers

 

There are a handful including the above plus Macquarie, Bankwest, etc who will consider. Each have different policies and qualifiers as to being able to use the latest 1 year in isolation so you just need to make sure you're across this and package the application to fit.

 

There a some that will, but even the lenders mentioned above will want to see 2 years financials and an explanation as to why the previous year was significantly less (if there is a difference of 20% or more)
So as Terry said, best engage a broker to assist you.

 

ANZ accept as policy, and ABN active for 18 months as opposed to 2 years from most.
CBA have a team that can pre-vet it for you and will want a thorough explanation (uncertain)
Bankwest accept as policy, but will want a thorough explanation and credit will need to accept it (uncertain)
Low doc lenders with decent rates accept it - using alternative forms of income evidence (e.g. accountant letters, BAS's, etc)

If you're a MEDICO, one year is accepted by many.

You can also source exceptions to policies, but this may be difficult if the circumstances aren't strong.

 

I think ANZ now require 2 years because of the Covid19 crisis.

 

Curious where you got this Terry?

My interpretation on their announcement is that from next week they will still use latest years income, but will need up to date financials. I.e. if a borrower is providing 2020 FY tax docs, they'll use that. If using 2019 FY, the borrower will need to provide up to date BAS's to confirm income position holds.

 

I could be wrong, I got this info second hand, from a broker not the source.

 

We have our own 90% lvr term loan product and accept 1 Years Tax return's with 4 Years ABN and credit score > 700.

Rate - 3.19%

Cheers


Richard

 

We are currently in touch with ANZ for a loan under their medico policy. ABN only 1 year old and no tax return yet, but still ANZ is saying that they can try to process a loan. Will see how it goes and will provide an update here once I get a definitive answer.

 

I am finding many lenders now insist on 2020 returns despite it being just July or August. And they want them lodged and assessed. The timing around schedule work, prepare, lodge and assess can be several weeks. We do our best to complete these asap but a two week turnaround to assessment is expected. Some will allow a draft return with a letter indicating it has been lodged and is considered a final return with no amendment expected. Of course, then that adds extra cost. And if the assessment indicates tax due this raises further issues. One recent lodgement required this to be PAID and me to provide ato account evidence of this. And it wasnt a large sum.

Some lenders have increasingly impractical trivial policies it seems.

Definately one where broker guidance and knowledge helps...but I swear some lenders just make **** up to be difficult

 

@Paul@PFI lenders are probably wanting to understand the income over the last 6 months by asking for more recent returns.

I haven't actually seen anything officially asking for 2020 returns, but lenders definitely are asking for more income verification. In most cases the last few BAS statements showing some consistency will be sufficient.

 

They would be better served to ask for BAS from 1 july 2019 onward and interim financial reports surely. What happens in September / Oct the 2020's wont be any good!

 

Thanks for sharing the knowlowdge. What about: Has anybody had any experience with giving two years worth of tax returns and having one of the tax returns being low due to an injury or illness? Will some lenders consider the highest return more favorably if the lowest return can be supported with surgury documents or similar to support leave from business?

 

Show them a year or two prior to the bad year and use that to support your argument. I've had success with this in the past.

 

Update: I first got in touch with ANZ on 6th August and today got an email saying our loan is approved. 90% LVR without any LMI and no tax returns supplied for a new business started less than a year ago.

 

superfast!

 

Indeed