Advice for lo doc home loans.

[v770]

Hi all

Just ventured into a business and been trading for about a year. I was wondering if anyone knew or could assist in acquiring a home loan with (self employed or lo doc) max 90% LVR and require only my last income tax?

At a glance, most bank require last 2 years of income tax and max 80% LVR. I'm looking at a relatively small loan of sub $300k. Last income tax for my business was $80k. Have 2 dependant (2 babies).

Any help would be appreciated

Thanks

 

[Peter_Tersteeg]

90% lo doc with 1 year trading history, I think your chances of getting something are slim.

It may be possible to get a full doc loan though. There's a couple of lenders that only require one full tax return.

get started on your tax first thing tomorrow!

 

[Mick C]

Hi all

Just ventured into a business and been trading for about a year. I was wondering if anyone knew or could assist in acquiring a home loan with (self employed or lo doc) max 90% LVR and require only my last income tax?

At a glance, most bank require last 2 years of income tax and max 80% LVR. I'm looking at a relatively small loan of sub $300k. Last income tax for my business was $80k. Have 2 dependant (2 babies).

Any help would be appreciated

Thanks

Def get your next tax return in and you may have a chance at full doc else for low doc 85% LVR possible with either Accountant letter Or 6 month BAS or 6 month trading statements. 90% LVR low doc you need accountants letter + 3 month BAS and 3 month trading.

As pete mentioned with such a high LVR your best to aim for full doc given you do have the " provable" income it seems.

 

[v770]

Thanks for the replies. So I will still need minimum 2 years of tax rtn even if I have the letter from the accountant to state my income over the last years?

Reason being is I want to purchase the house first this year before lodging my 2nd tax return.

 

[Peter_Tersteeg]

Most lo doc lenders want to see you've been in business for at least 2 years, you don't need to give them tax returns.

If you're worried about your next tax return being lower than the previous year, it's not a problem at this point. Lenders will allow you to use the 2013 tax return until at least January. There's quite a few lender that will go beyond this and give you until March to get your 2014 returns done.

If you don't want to lodge your 2014 tax return because you've got a big tax bill, this is also not a problem. You can do the return, sign it, but don't lodge it. Lenders will also accept this.

 

[Mick C]

Thanks for the replies. So I will still need minimum 2 years of tax rtn even if I have the letter from the accountant to state my income over the last years?

Reason being is I want to purchase the house first this year before lodging my 2nd tax return.

If your going down the low doc path you dont need any tax returns at all, that's why it's called low doc

Just an accountants letter at 85% LVR ( min 1 years abn history only + GST registered depending on income amount) ....at 90% LVR you need accountants letter + trading statements.

 

[tobe]

If you don't want to lodge your 2014 tax return because you've got a big tax bill, this is also not a problem. You can do the return, sign it, but don't lodge it. Lenders will also accept this.

Ive been finding lately quite a few also want the assessment notice.

 

[Mick C]

Sounds like something Advantage would ask for...
Most of the non banks low doc are quite straight forward...accountants letter only and it's good to go.

 

[Peter_Tersteeg]

Ive been finding lately quite a few also want the assessment notice.

I've generally found them fairly good about this. Most lenders know that people don't want to pay their tax bill until they have to. Usually signed returns will cover it, if not a letter from the accountant confirming the returns will help.

 

[v770]

Hi all

Much appreciated the replies. I did approach one lender at rams to which they required 1 year tax return plus accountants letter and they will only service 80% LVR.

However, they don't seem too comfortable anymore and require further docs. Went to have a look at state custodian Web page and they seem to service at 90% and require only min 6 months of abn and gst registered.

It helps here a lot with the responses. I thought I was at the end and no lenders will be able to assist.

Any of u guys know non bank lenders that may help my situation?

Thanks again guys

 

[Mick C]

Dont' know your exactly situation. But if your after a 90% low doc than you need more than just one accountants letter.

At 85% it's ok with just the one accountants letter - a mixture of non banks, private banks and private lenders etc...

 

[Paul@PFI]

Michael - One thing to watch...

Also be aware that lodoc and nodoc loans can raise an ATO audit target on your back.

The ATO have audited many such borrowers who signed off on declaratiosn that they earned sufficient income to support a loan of say $1m...Then they made loan repayts on that loan. However, their personal tax returns did not support such cdeclared incomes. In a huge number of cases they earned very little. How did someone of a very low income maintain the repayments...???

The ATO view is tax avoidance in the cash economy..The ATO has a long standing series of s264 notices to major lenders who do lo/no doc loans that acquires information on their identities, their certified level of income and much more. Important you know that what you tell the lender is also shared with the ATO.

Thats why lo/no docs loans should be carefully considered. The ATO may ask later where the proceeds come from if your income doesnt stack up. Over 65% of lo/no borrowers were found to have underdeclared income

 

[tobe]

Michael - One thing to watch...

Also be aware that lodoc and nodoc loans can raise an ATO audit target on your back.

The ATO have audited many such borrowers who signed off on declaratiosn that they earned sufficient income to support a loan of say $1m...Then they made loan repayts on that loan. However, their personal tax returns did not support such cdeclared incomes. In a huge number of cases they earned very little. How did someone of a very low income maintain the repayments...???

The ATO view is tax avoidance in the cash economy..The ATO has a long standing series of s264 notices to major lenders who do lo/no doc loans that acquires information on their identities, their certified level of income and much more. Important you know that what you tell the lender is also shared with the ATO.

Thats why lo/no docs loans should be carefully considered. The ATO may ask later where the proceeds come from if your income doesnt stack up. Over 65% of lo/no borrowers were found to have underdeclared income

65% of who? Low Doc loans that were audited? Thats a pretty good strike rate for the ATO, 65% of the people they suspect of tax avoidance actually were.... I wonder how that stacks up with the other areas the ATO targets for audits.