Self-employed new business

Started a business in October last year, the business is a different industry to what I was working for the last 18 years and my income is lower at the moment.

I’m going to be looking to refinance a property around March next year.

What is the best way to approach the refinance?

 

Wait at least another 6 months.

You're now self employed. You need to be in business for at least 2 years before lenders will even look at lending you money. Most lenders want 2 consistant years of tax returns showing enough profit to service the loan. This probably means you need to increase your income and then wait until it's reflected in a couple of tax returns.

 

Thanks

Not what I want to hear though, I have an IO expiring in March.

Can I not say I’m self-employed and just provide some payslips from the business? Dumb question I know, but I’m asking it.

 

Nice try but no

 

Funny enough, lenders have anticipated that scenario... there are a few pretty simple checks that will flag if you try out the theory... along with some commentary along the lines of "don't come back next time"

Being a different industry, you'll need to wait this one out and build the income up.

 

Plenty of people have tried and have failed

Like the above, if you want to stick k with a major, need abn registered for 24 months with 2 years financials.

Anz is a little more relaxed, 18 months ABN and 1 years financials.

 

Thanks, appreciate the info.

Rates are low enough at the moment for the end of IO not to be a big deal though I would have liked to refinance.

 

A range of further factors may also affect this eg - Sole trader ? Company with PAYG income? And lenders are pretty savvy with tax non-compliance (eg PSI) and do raise eyebrows. It can lead to credit decline. BAS lodgements as evidence, tax compliance and any accrued liability (debt), Growth or change in t/over and some lenders will accept 12months + but others wont. Definately a area where a broker will assist. As Tony says lenders policies vary a lot but this will require some present tax compliance and evidence and many lenders have 18-24 month requirements.

Lenders will do a search and see you are a Director of ABC Pty Ltd and take it from there. Payslips themselves wont be acceptable. They now also require updated and lodged tax affairs and will also seek to confirm lodgements and payments are all compliant and support the reporting. They dont generally accept DIY accounting either and will start asking for accountants information. We get asked for letters for lenders and are very limited in what we can do and few lenders just rely on these any more.

Also the value of profit / income. If you earn $3K a month for 18 months then it grows to $10K the lender is not likely to accept $10K as a basis for income

 

Refinancing is unlikely to be any prettier than your current terms - so P&I would be better than refi options in this case.
Cant accept payslips from a company your a director of unfortunately - not acceptable income evidencing.