Will I/We qualify for a full doc loan?

[OU812]

Silly question but not really sure.

I started a new business Nov last year with a partner. So far so good and am now happy to commit to a mortgage again. We ( business partner and I) have been paying ourselves the equiv of $60k pa each. Hoping that it will end up more at year end but comfortable with $60k ea at this stage.
Not sure if it matters but we are registered for BAS, we have unit trust with corporate trustee+ discretionary trust......you get the idea.

My wife is the bread winner so to speak, she's been employed with her current employer as an accountant for the past 18months and is on $90k salary.

Looking to borrow ~$600k
Hoping for 95% LVR
Looking or 100% offset to put savings ( for just incases)

I dare say the loan won't stack up on her wage alone, so does that mean as soon as my situation is included it's automatically a low doc animal?

She can supply everything needed ( I assume) for a full doc loan.
I can only supply a company tax return for 7 months that, being the first 7 months in business, doesn't show much income. I can also show a few BAS statements. Oh, and we have had a mortgage of this size before with CBA when I was self employed 5 years ago.

Thanks for any help

 

[Aaron_C]

It depends on what you were doing before you went into business. It is possible though.

 

[OU812]

Thanks for the response at this late hour Aaron.
I was working as a commercial realestate agent...I've now setup a commercial agency of my ( our) own.

Cheers

 

[Mick C]

If the loan doesn't service on your wife's income alone and your'e after a 95% lend then the chance of approval is very very slim; close to none as your income can only be declared under low doc lending ( presuming your not a contractor) BUT under low doc lending the max LVR is 85-90% and the rate is extremely high at 90% as well ( +4% higher than standard )

Keep it under 80% and the rate are okish.

 

[Peter_Tersteeg]

If the loan doesn't service on your wifes income on it's own, I think the chances of getting a 95% loan are practically nil. Even if you a lender might consider you to be in a similar role, a 95% lend would simply put this into a risk category far to high for them to be able to consider it.

I'm not even sure a 95% lo doc does exist, but if one did your chances of a successful approval are negligible. I am aware of 90% lo doc loans but even then it's not a good scenario at all.

The best suggestion I could give is to wait until you've got 2 full financial years of trading history, and also try to get to the point where the LVR would be 90% or lower.

 

[Marty McDonald]

I would say due to you past experience you could get away with a minimum of 1 full years ITR's for the business and you. 95% LVR is a tough ask and credit scoring lenders may be a problem. That said I would give it a shot as I think the lenders appetites to lend have increased significantly over the last few months and credit scoring algo's have been dialled down.

 

[Aaron_C]

Did something similar at 90% the other day. It is a bit of roulette at 95% but depends on servicing and net asset position it may be possible. Never say never.

 

[OU812]

Thanks for the advice....

I'm not sure how much 'lend' could be supported, but what would be the issues if any from my wife applying for a loan for an IP...and then changing our minds once settled and move in.

I understand that a percentage of the potential rent would be taken into consideration when calculating serviceability. Can I assume that only half of our current 'family expenses' would be taken into consideration on the other side of the ledger?

 

[Aaron_C]

Getting a loan for an IP is harder than an PPOR as credit scoring is harsher and your max LVR is less.

 

[Brady]

I have just logged on this morning to see that I've got a loan approved similar to this.

Client only returned to s/e April 2013, was PAYG from July 2012 - April 2013.

But few factors involved

- Client was s/e 2011. All in same industry.
- Existing bank customer
- Income used for servicing was well below previous years tax returns
- Partner working in steady job
- 90% LVR


So its possible and sounds like you could tick a few of those boxes similarly.

Who do you currently bank with?
Was your last two years as PAYG decent income?
Can you manage to 90% LVR?

 

[Shahin_Afarin]

1. There is close to zero chance getting a loan at 95% LVR when the above self employed start dates

2. Get a broker to see if the application can work using the wife's income

3. It may be preferable to go with a lender that doesn't credit score and will go to 97% LVR.

 

[OU812]

Who do you currently bank with? CBA
Was your last two years as PAYG decent income? Reasonable for most peoples standards
Can you manage to 90% LVR? We can if we have to.

Cheers