Hi,
I have a question which I am finding quite difficult to get an answer for. When is one regarded as being self employed?
I get paid a regular salary from a company that my family own (they live overseas). I am a director of the company and will have an equity interest in the future but do not have one now. The fact that this is a family company, does this make a difference? Does it make a difference how many employees the company has? I have heard that banks regard one to be self employed when one owns a percentage of the company, so would this mean that I am classified as in full time employment? Does the nature of the business of the company make a difference?
Thanks for your help
That would be considered self employed but there are some grey areas with the situation above. Have you engaged your banker or broker? The other thing is that difference lenders have different policies when it comes to how they view self employed applicants and it varies greatly.
What is the problem exactly? Does it relate to income or showing documentation?
TheFinanceShop | Elite Property Finance
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Sounds like S/E to me.
Cheers
Jamie
Jamie Moore | Pass Go Home Loans Pty Ltd
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Almost certainly self employed, but if you give more info it may be a bit easier to discuss.
Wow going to be bullish here but i have to disagree with the others.
I would suggest you would be considered PAYG employed but we would still need to provide copies of the Company's last 2 Tax Returns.
Done one very similar to your position for a forum client in Dubai only recently and didnt have an issue there.
Cheers
Yours in Finance
Richard Taylor | Australia's leading private lender
Richard, its one of those weird ones. I would agree with you that technically the OP isn't self employed as their only income is a set salary and they wont be receiving any variable income via company profits due to not being a shareholder, but as soon as lenders see an applicant is a director of a company, they automatically assume self employed.
Just using an example, if the Managing Director of Rio Tinto on a salary applied for a home loan, would they seriously ask him to provide the company's last 2 tax returns?
I suppose its a matter of convincing the lender of the situation.
Cheers
Tom
Hi Tom
Exactly my sentiments.
Cheers
Yours in Finance
Richard Taylor | Australia's leading private lender
I guess that makes sense. So do the banks do a search on every applicant for their directorships or will they look into my employer company so see who the directors are?
I am just trying to find the best way I can put this forward and potentially change the current setup if need be i.e. if I resign as director will that help? I have other family and wife that are also directors so I do not have to be.
I earn a salary from the company so it is quite painful to have to go through everything to get a simple mortgage, but I guess it is what it is post GFC.
Will the banks look into the shareholders of the company, directors etc?
Thanks Tom and Richard
Hi Rich
Yes lenders will often undertake a Company search and you will also show up as a Director on your CRAA.
As i say careful planing probably needed but resigning as a Director might have other implications which need to be considered first.
Cheers
Yours in Finance
Richard Taylor | Australia's leading private lender
Hi Rich
Why not just get Richard to suss it out for you instead of running around trying to work out which lender will do the deal?
Cheers
Jamie
Jamie Moore | Pass Go Home Loans Pty Ltd
http://www.passgo.com.au
Email Me | Phone MeMortgage Broker assisting clients Australia wide Email: [email protected]
Some banks do and some don't and even the banks they do – do not do it all the time.
Are the salary credit regular or irregular?
TheFinanceShop | Elite Property Finance
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My Salary is regular every month, that is why I was hoping to be simply classified as full-time salaried.
Would they still have an issue if my wife was a director of the company and I was not then? Thanks.
Excellent – that should be ok just (based on the information provided) but make sure your broker or banker validated this prior to submitting your application.
TheFinanceShop | Elite Property Finance
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