All Topics / Help Needed! / Getting a loan whilst self employed

Viewing 7 posts - 1 through 7 (of 7 total)
  • Profile photo of samwebstersamwebster
    Member
    @samwebster
    Join Date: 2013
    Post Count: 1

    I have been self employed for 4+ years, which was the result of an unexpected retrenchment during the GFC (who does not have a GFC story!). Anyway the permanent position I had paid me well circa $240k pa. I was therefore able to secure two bank loans for two separate investment properties in Sydney (currently negatively geared as that was out tax strategy at the time).

    The challenge I have is, whilst minimising my tax output as a sole trader, I have also minimised my net earnings. Therefore for any loan for future property, I am deemed as high risk and have yet o find a way to buy my next property. Instinctively I don;' want to sell the two properties I have. However I am open to all ideas and advice! 

    Thanks Samantha

    Profile photo of Jamie MooreJamie Moore
    Participant
    @jamie-m
    Join Date: 2010
    Post Count: 5,069

    Hi Samantha

    Sounds like you're having problems with your borrowing capacity.

    If you're self employed there's certain add-backs that you might be able to use to enhance your borrowing power – such as depreciation, interest repayments, additional super, etc.

    Have you spoken with a decent broker about your situation? 

    Cheers

    Jamie

    Jamie Moore | Pass Go Home Loans Pty Ltd
    http://www.passgo.com.au
    Email Me | Phone Me

    Mortgage Broker assisting clients Australia wide Email: [email protected]

    Profile photo of vagirl2012vagirl2012
    Participant
    @vagirl2012
    Join Date: 2012
    Post Count: 47

    I agree with Jamie.  You'd be best to talk to a decent broker who should be able to help you out with some viable options.

    Profile photo of PLCPLC
    Participant
    @plc
    Join Date: 2012
    Post Count: 400

    That is the issue with a lot of self employed people. While annual revenue might be high, after deductions the taxable income is much lower which leads to a lower borrowing capacity.

    As the others have said, find yourself a decent broker who can help you through the muddle. Along with what Jamie has suggested, lenders have differing servicing calcs so there might be some out there who are more sympathetic to your current situation.

    Cheers

    Tom

    PLC | Phoenix Loan Consulting
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    Melbourne based Mortgage Broker | Making Finance Simple

    Profile photo of Colin RiceColin Rice
    Participant
    @fms
    Join Date: 2011
    Post Count: 338

    Depending on you financials and how they are structured will be viewed differently by banks.

    As suggested it is advisable to seek the assistance of a broker who has knowledge and experience working with self employed people. 

    if you have approached your bank and they have said no, it does not mean there are not other options available. 

    Colin Rice | CDR Finance
    http://cdrfinance.com.au/
    Email Me | Phone Me

    Perth Based Mortgage Broker - Investment Property Finance Specialist | E: [email protected]

    Profile photo of Richard TaylorRichard Taylor
    Participant
    @qlds007
    Join Date: 2003
    Post Count: 12,018

    Sam, your story is a classic situation many self employed clients experience.

    A decent Broker will be able to give you the options and alternatives as not all lenders requirements are the same.

    Cheers

    Yours in Finance

    Richard Taylor | Mortgage Broker helping investors build their wealth thru property
    http://www.mortgagecapitalaustralia.com.au
    Email Me | Phone Me

    0-40 Properties in a decade with a unencumbered portfolio value in excess of $40M. Ask me for a copy of my API Interview.

    Profile photo of Jamie MooreJamie Moore
    Participant
    @jamie-m
    Join Date: 2010
    Post Count: 5,069

    I just had a deal that involved two self employed applicants on relatively low incomes. I was able to make it work by being careful with the lender it was placed with and claiming back each cent from every add-back available.

    Cheers

    Jamie

    Jamie Moore | Pass Go Home Loans Pty Ltd
    http://www.passgo.com.au
    Email Me | Phone Me

    Mortgage Broker assisting clients Australia wide Email: [email protected]

Viewing 7 posts - 1 through 7 (of 7 total)

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