I just wanted to write a few lines on something that concerns me.
I am getting more and more clients who believe that if you have a 20% deposit then a LODOC loan means you can buy property regardless of your income.
A LODOC loan requires that the applicant declare his income level. The loan will be assessed on that persons ability to service the debt on his declared income.
Thats easy they say- just tell me what I need to declare in order to get the loan through.
Overstating your income in order to get a financial gain is FRAUD. Being advised to do this by a broker is still FRAUD on your part and certainly unethical behaviour on his.
The ATO are cross checking applications against tax returns. Where they see a discrepancy they are asking people to come up with the additional tax required for the higher income.
So you tell the ATO that it was just a lie to get a home loan?
Be interesting to see how this goes when it starts hitting the courts.
Food for thought people and thanks for letting me air this[blush2]
Simon Macks
Mortgage Broker
http://www.mortgagehunter.com.au
0425 228 9853 year fixed rate – 6.85%
Comments may not be relevant to individual circumstances. If you intend making any investment, financial or taxation decision you should consult a professional adviser.
Hi Simon,
11 month’s ago I purchased on a lodoc, Had 20%+stamp duty.
Plus I had only been trading in my business for 12 month’s couldnt really show much at all, I must admit it was a pain in the neck to get it through but it was successful.I guess I was fortunate with the broker I used, he’s very experienced in the IP WORLD.
There probably sourcing information from non conforming lenders.(Which by the way, one is starting to advertise on T.V).
I’m in the service industry, I understand your concern.
cheer’s
Joseph Scarcella
prime real estate agents
property management specialists E: [email protected]Joe,
Regardless of the lender they require that your income is stated.
LODOCs were designed for the self employed to submit a loan that didn’t need to be supported by two years worth of trading records or tax returns.
Some LODOCs only need a new ABN to get through.
In any case – overstating your income to get a loan is fraud. I trust that you didn’t need to do that [cap]
Cheers,
Simon Macks
Mortgage Broker
http://www.mortgagehunter.com.au
0425 228 9853 year fixed rate – 6.85%
Comments may not be relevant to individual circumstances. If you intend making any investment, financial or taxation decision you should consult a professional adviser.
HI Simon,
It was done legit, there’s no way I would put myself nor my broker at any risk.
(to ease your mind I”m with a non confirming and paying A HIGH RATE the property was just to good to let go).
cheers
Joseph Scarcella
prime real estate agents
property management specialists E: [email protected]Very good post Simon well done.
Some people confuse using “innovative” techniques and thinking “outside the square” with breaking the law. Think outside the square but always act within the boundaries of the law.
I know there are hundreds of brokers that would tell a client “just put $100k down in the income section… “. Sometime the broker will fill out the form for you. But were will they be when you are dragged into court? They won’t be holding your hand that’s for sure!
Investing in property is not something that is achieved overnight. It takes years of educated, diligent and disciplined buying.
Cheers
Stu
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