self employed and having trouble getting loan

I agree with Anthony that a Mortgage Broker will be able to give you an overall idea as to the likehood of you obtaining finance but have disagree with the concept of getting a pre-approval now on the basis that your circumstances will shortly change.
 
Unfortunately one of the underlying questions any lender or Broker has to ask under the new Credit Legislation is whether you believe anything in relation to your own financial circumstances will change over the next 2 years and do you think this will effect your ability to repay the loan.

Clearly the answer in your case will be YES and the loan would not proceed.

The post goes well with my earlier post in the FInance section about full disclosure.

Just because you go to a Contracted position does not mean that you would not qualify for a loan.
Other factors are taken into consideration and as always there are too many variable to make an accurate assessment from the information to hand.

Cheers

Yours in Finance

It may not be impossible. Are you going to contract to one organisation? Will they be your only source if income? If so it may be do-able. I did once recently only 1 month self employed ang got 90% lvr $680k loan approved no issues. It really depends on your contract situation.

Hi Jake H,

I truly, truly sympathize with you. I have always had trouble applying for a loan until I got St George, CBA and Westpac on side.

I am fully self-employed NOW. Couldn’t be bothered to take crap from anyone anymore so left the rat race two years ago.

I look after international students at home. I have lodged ax returns for this as a business activity over 10 years when it obviously has ceased to be a “hobby.”

Before I carry on any further, I just want to tell you that I have no students in the garage . I don’t have one. I don’t have them bunking together in double and triple bunks. They are living in their nicely furnished rooms, thank you. ))). Not a shonky landlord by any stretch of the imagination. I have 6 of them at the moment. Yeah, with my four kids, how??? House has 10 bedrooms, four showers/toilets, two kitchens, one kitchenette, two living areas. So yes, it’s big enough for all of us. It used to be a duplex and now one huge house.

Anyway, going back to the story: The tax return shows net income at the end of $10k or $12K on average. Without going through the tax returns properly, wet-behind- the- ear lender will say, ” you can’t afford to borrow”. I say, did you read what’s in front of you? Do you know what “add backs” are?

The business expenses included food, water, electricity, interest, internet, telephone, mobile, fax, capital investment, foxtel, gas? Can’t you see we are all living FOR FREE. “Our living costs have already been looked after.” If your calculator is imputing living costs on what I can borrow then you have to give something back???!!!

Then they’d say “Oh, you’re too rent reliant.” to wit, I’d say, and what’s the chances of all of them being vacant all at once?

This is what I don’t get. People WHO are employees and WHO gets high salary get a loan quick smart. Common sense will show that they are the higher risk. Because if they lose their jobs as managers making $100,000 it isn’t that easy to find another job to replace their income if they get sack. Back when I was working as a call centre staff, I said the lender, “I can replace my income any time. Right now, I just need to call Julia Ross.”

Rent reliant??? Have you ever heard of multiplicity of income??? If I lose a $100K job today, that’s $100K gone in a blink of an eye. Whereas little old me, can replace my pittance of an income any old day. Have rents coming in from all directions. For me to lose all my income at once would mean that in ONE day, a fire breaks out in Cammeray. A tsunami over 50 meters and goes 1200 meters inland hits Avalon. A truck crushes into Ryde. Flooding in Richmond. An earthquake hits Gympie. And a tornado tears out SA from Adelaide to Millicent. That’s just not happening.

Having calmly explained this to the lender, she/he then smiles and says, “I understand what you’re saying but we don’t make the policy”.

At one stage it got too hard, that I say I’m single because the one time it was disclosed I have four kids, all hell broke loose. The application was approved eventually but it went all the way up to the CBA business head who saw sense. God bless him.

Yes, I appreciate the dilemma that goes with being self-reliant, ambitious, give-it-a-go self-employed people. In Asia, they are given preference over employees. I don’t get the attitude towards people who carve their own future. i simply don’t.

This is my rant for the day.

Please take care.

Angel

Jack- yesterday i had dinner with some of the excec from St George Bank – if you have a good long history in this field of work ( 5 years +) a loan can be considered for self employed after 1 full year of trading

Cheers
Michael