Hi guys, Long time lurker first time post. Need some broker assistance. I am looking at refinancing my current home loan and investment loans. We have 2 applicants - one on payg and the second on self employed. This is causing an issue which I need your assistance with. Usually I have no problem with the loan however my husbands last 2 tax returns seem to be causing an issue. In my situation I have PAYG of $90k income so it seems ok, however my husband has a profit and no salary in 2014 and in 2015 has a profit and a salary of $100k. It seems the bank i am looking at takes the lower which screws up our application. I am lost as to what this means? is this the credit tightening coming in? we purposely waited to 2015 returns were lodged and it seems it did not help!!! This is over my head as it seems to me even in 2016 we are making alot of money in my husband company however it does not matter due to bank taking the 2014 return as bible....even if i show them the BAS for the last 2 quarters which are amazingly positive!!!! So what do i do? any banks take 1 year of financials at a good rate? are they wrong in using 2 years and taking the lower? i am a little lost? Please help ,Kate!
Try another bank. Most will look at the last 2 years income for self employed. Both the company and the person. Some will then average these 2 years, others will go on the lower of the 2. There are a few lenders that will go on just one return, the most recent.
Definitely sounds like the case of using a lender who works from 1 yr tax returns - there's a handful which do this, but their serviceability models are high varied. Touch base with one of the brokers on the forum - assisting self employed clients is part of parcel of business, you'll definitely be set on the right path.
1 year financial is available for many banks/lenders. As long as your ABN is register 2 years. From my memory, ANZ they are still doing 1 year financial. Also, you or your broker can explain the profit/income distribution situation on the loan application note, that your husband has consistent income over 2 years, just the way of distribution is different. End of the day, normally lender/bank is looking at "taxable income" at Notice of Assessment.
ANZ only need one year of tax returns. I have done deals with them when 1st year return of a customer has been near zero (start up) and 2nd year being able to service - and only paperwork asked for. Some lenders will do reasonable lo doc (with rates not much higher), generally only for LVR below, or well below 80%.
St George and CBA also will go off one years financials - there's definitely hope for you! Lenders vary widely in policy so a bad result from one bank does not necessarily mean the end of the road.
Hi Kate, Don't waste your energy going direct to the banks. Give one of the mortgage brokers on these forums a call and have them arrange things for you. Much easier. They do this sort of thing every day and will know exactly what to do.
Eh, not really at all. Business can distribute nothing to personal name and retain earnings, addbacks, NOA will be net of any other personal tax treatments. The real figures all come down to the company tax returns supported by personal returns to verify directors wages.
To obtain a standard residential home loan for the self-employed, would most banks consider the FY12-13 + FY13-14 tax returns? Or will they be asking for the FY14-15 tax returns??
Some banks have started asking for 2015 returns, some more will start asking in March/April, others leave it till June before they want the previous years returns. In practice the assessor can ask for the most recent one if they want anyway.
