Ok,so glad i found you guys…. Here is my sticky situation.
I am currently in the market for a home loan. Purchasing at the end of year 2008.
I am currently employed earning around $34 000 after tax per annum.I also have a business on the side which will earn around $40 000 per annum after tax as well( ive had ABN for just 4 months),i would like to have the loan together with my husband who also is sole trader earning about $40 000 after tax as well.(he has had his ABN for 1 year)
I have a deposit of $150 000 (there will be more at the end of this year),we have no credit cards or debt either.We would like to borrow $350 000 to $400 000.
What are my options for loans and who gives finance to people like us? I am wary of low-doc loans,should i be?What will help us get a loan?Will we be able to get a loan?
many thanks in advance… dont be wary of lo doc loans… be wary of brokers selling you what they call a low doc loan which could just be a non confrming loan (Bluestone, Pepper, Liberty etc) with a higher interest rate, no structure and most of all give you a high exit fee (up to 2-3%) should you find out you've been fleeced and want to go elsewhere. Which brings me to my next point… a BS (non conforming) lo doc loan could leave you with suspicious looks from proper low doc lenders!
Lo doc and easy doc loans from proper mortgage managers or banks (usually not the best for lo doc) are specifically designed for borrowers of your type and carry none of the dysfunctional borrowing charateristics mentioned above.
You may wish to do yourself a favor (invest a bit of time) and jump onto Cannex (www.cannex.com.au) and look for a good qulaity 4-5 star rated loan… depending on which state you are in try Awesome Mortgages who are well rated by Cannex…
With a deposit like that you should qualify for a Low Doc or a No Doc loan easily. Many require a 2 year ABN, but there are a few out there where there is no ABN requirments.
you may even get through with a normal full doc loan as some lenders only require 1 year self employment if in the same industry as you were previously employed.
Terryw | Structuring Lawyers Pty Ltd / Loan Structuring Pty Ltd
http://www.Structuring.com.au
Email MeLawyer, Mortgage Broker and Tax Advisor (Sydney based but advising Aust wide) http://www.Structuring.com.au
I dont think a non conforming loan is necessary and agree to some of the comments made by the previous poster.
I do however disagree that the standard lending institutions do not offer some of the best lodoc style loans.
These loans can often be included in a Professional package so come with all the bells and whistles when it comes to interest rate discounts and fee savings.In saying this where possible i would always use a full doc lender initially and then look to go down the path of lodoc borrowing once you have exhausted all of your options.
A good mortgage broker should be able to enlighten you further.
Richard Taylor | Australia's leading private lender
Thank you guys! i am employed in the same industry as my business. Can you give me any info on the sort of info and proof of income /employment i will need to provide my lender in preparation of loan application.
regards…Dependant on the loan amount you would probably get together last 3 PAYG payslips and BAS returns for yourself.
For your husband maybe his 2007 Tax return although will only show part of a year and his last couple of BAS statements.
Also evidence of savings (i.e copy of your Bank statement showing the $150K) and lastest credit card statement.
Finally 100 points of ID for both of you (copt of drivers licence and Passport gets you there but if no passport maybe medicare card).
Hope this helps.
Richard Taylor | Australia's leading private lender
I haven't had to do it as I have been self employed for many years but I am sure you can backdate ABNs for the 2yrs?
Is this so?
cheers, Ian
Hi Ian
Yes you can backdate your ABN but this will bring with it question from the ATO.
I do not think you need to as mentioned.
Richard Taylor | Australia's leading private lender
Hi,
A LoDoc option is usually the easiest way to go. Some lenders will do 1 year ABN, or no ABN, but these loans require verification from your accountant (as apposed to the standard 2 years ABN) . This way you won't have to back date your ABN. Be wary with LoDoc's because with all the big 4 LMI is applicable as soon as you borrow over 60% LVR, as apposed to 80% with a Fulldoc. Having said that there are lenders out there that do LoDoc's at 80% with no LMI.
good luck!
kind regards,
richard …. what sort of questions will the ATO raise. I have been meaning to register an ABN since we purchased our investment property back in december 2007 on advise from our broker / accountant but havent done so as yet … will this be ok? we want to use the ABN for trust set up and property development potentially under low doc thanks jazamite
An ABN is meant for people running a business. If you back date an ABN when register you are saying that the business started at this date in the past. This may not cause problems, but you may find the ATO might query it. If you started a business why no income in the tax return etc. Nothing major.
If you are registereing an ABN for a trust then that is a different matter. You could not really back date it as the trust deed will be dated and stamped by the office of state revenue. Trusts will also require their own tax returns too.
Terryw | Structuring Lawyers Pty Ltd / Loan Structuring Pty Ltd
http://www.Structuring.com.au
Email MeLawyer, Mortgage Broker and Tax Advisor (Sydney based but advising Aust wide) http://www.Structuring.com.au
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