Trouble getting a loan due to newly self employed

Hey guys,

I've been looking for a while to get a loan for my next PPOR and having huge difficulties. First off, I currently have 2 IP's with a bit of equity and am currently renting. equity is nothing special. maybe 100k in one and 40k in the second (rough guess). I'm working in the mines as a consultant under my own ABN (the problem) and have only been doing so for less than a year. I have plenty of cash for a deposit and the repayments arent a problem and i have been in the same line of work for 5 years but the first 4ish were as an employee.

Now everywhere I look i get told I cant get a loan for at least 2-3 years because Im now technically self-employed. Ive looked at the rent to own situation very briefly but dont know much about it. I also thought about buying in my sisters name and then gifting the property over in a year or 2 when im eligible for a loan although im not sure if id have to pay stamp duty again and would prefer a better option if there is one.

Any ideas would be much appreciated. Cheers.
 
There are a few lo doc loans out there where you only need an ABN for 6 months. The more deposit you have, the better deal you'll get.

Yours is a common problem for newly self employed. I've seen this in contractors quite a few times. One job they're PAYG contractors, then they decide to save a bit of tax and set up a company. It destroys their ability to borrow overnight.
 
self employed / dole bludger / crack addict / prostitute / minor / casual employee

all in the same basket.

trust me - i'm 4 years into it and still having issues.

god forbid you forgot to pay an eBay invoice 3 years ago, as well.
 
Don't give up hope - I am recently self employed and recently managed to get a loan with CBA. They assessed my situation and decided to accept my income as if I was an employee. Loan is in two names though (with my wife). 80% lvr. I have worked in the same industry for 8 years and then been running own company for 4 months. (abn 4 months old).

Regards,

Jason
 
Ive had my ABN about 9 months. Deposit could be around 50k although I'd prefer to keep some put aside if possible. As I work away and am not home alot I'm only looking for a small 1 or 2 bed apartment in Brisbane CBD (2-300k). Doing it with a partner would make life a lot easier but unfortunately I'd be going solo. Maybe I'l give CBA a call and cross my fingers.....

PT Bear... do you know any of these lenders??
 
Just spoken to bank about getting a loan and bm said they are thinking of stoping low doc loans for employed people as they can and should be able to show payslips and tax returns, but he thinks they will still continue to offer low docs to self employed, that's the anz
 
Hmmm.

I'm thinking that if you've gone to a contract basis and can show you're earning more than you were before, and you have a SOLID history in the industry (i.e. virtually same job etc) then you can get em through without the s/e - contract stigma on a full doc, not low doc.

Actually, we just did one with Westpac - they guy was paye then went to contract as an accountant. They took his historical figures as his YTD was more than his prior income was.

(Which I know westpac would also normally treat as s/e but it was a professional occupation per se)
 
All teh same probs and man have I had to pass up some opp's.

My conclusion - CASH . I'm selling I should say, something to use as deposits rather than squirming equity to them . Offer 20% down + equity but be prepared to go 30% ,they seem ok with equity if there's also some cash on the table .
Although , my latest isn't sign sealed and delivered yet , depending on a sale but the receptions been a lot more enthusiastic, kinda warm and cuddly this time round so here's hoping.

Good luck
 
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Ive had my ABN about 9 months. Deposit could be around 50k although I'd prefer to keep some put aside if possible. As I work away and am not home alot I'm only looking for a small 1 or 2 bed apartment in Brisbane CBD (2-300k). Doing it with a partner would make life a lot easier but unfortunately I'd be going solo. Maybe I'l give CBA a call and cross my fingers.....

PT Bear... do you know any of these lenders??

If you're at an 80% LVR or lower they can be a bit more flexible. If your LVR is above 80% you get into mortgage insurance territory and it can become harder.

If you can demonstraite that you're earning a similar income to what you were before, then you should be okay. The hard part can be how to demonstraite this, and prove that your expenses haven't gone up as well.

There's a good chance that it can be done, but I suspect you're going to have to fight it out with the bank. You'll probably get a lot of additional information or further clarification requests.

I'd advise you get a pre-approval before buying, and make sure you get it in writting.
 
If you are self employed and have 2-3 years of tax returns, it shouldn't be an issue. I was able to borrow $1million in LOC by just providing my tax returns for the last 2-3 years.
 
Cheers guys. I spoke with CBA who told me as I have no stock or inventory to turn over, no expenses and all my work is for one contractor they will just treat me as an employee. Happy to lend up to 90% LVR. And yes I'm getting a preapproval in writing. Thanks. =)
 
Try $350k+ for a 1 bedder, if you ignore all the serviced apartment crap on Margaret Street...

In the block I own in West End we just had a 1 bedder (with exclusive use courtyard and LUG) at auction go for $310K - just got to know where to look.
 
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