08 Jun 2023 Podcast: Deep Dive – Self Employed Policies Explained
In this episode, Evelyn and Maddie talk about the intricacies of self-employed lending policies and what this could mean for you.
We unpack the opportunities faced by sole traders and companies in the mortgage lending landscape. From deciphering income verification methods to understanding documentation requirements, we provide valuable insights to help you navigate what’s needed to get a loan!
Find out your next step in property finance:
You Have My Interest is brought to you by Everlend, a mortgage and finance broking firm built for the purpose of educating and empowering you to make informed financial decisions tailored to your wealth goals. Find out more and book in your free initial consultation at
https://www.everlend.com.au/
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You Have My Interest is brought to you by Everlend, a mortgage and finance broking firm built for the purpose of educating and empowering you to make informed financial decisions tailored to your wealth goals. Find out more and book in your free initial consultation at https://www.everlend.com.au/
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Find out more about You Have My Interest at everlend.com.au/podcast and connect with us at podcast@everlend.com.au
You Have My Interest provides information and educational content relating to mortgages, finance and property. You Have My Interest‘s content is general in nature and does not take into account the individual financial, legal or tax needs or objectives of its audience members.
It is not intended as a substitute for professional advice. Listeners should seek out a licensed professional to discuss their individual financial, legal and tax requirements.
If you need mortgage or finance advice tailored to your own personal situation, contact Everlend today for a free consultation. Everlend are authorised credit representatives of Loan Market Pty Ltd, Australian Credit Licence number 390222.
Podcast produced with Apiro
Please find a Podcast summary below with the interview highlights:
The main topic delves into how banks assess self-employed income for borrowing purposes. Key points include:
- Self-Employed Income Assessment:
- Banks usually require a minimum of 24 months of ABN registration. Exceptions may apply for industries like medical or IT.
- Income is assessed based on tax returns or other documentation like BAS statements or business accounts. Banks may average the last two years’ income or consider recent trends, especially for occupations like doctors.
- Company Structures:
- Differences between sole trader, partnership, company, and trust structures are explained, focusing on tax implications and borrowing considerations.
- Banks assess both directors’ wages and company profits but only use the applicant’s share of profits in partnership or shared structures.
- Modern Policies:
- Some banks now assess self-employed income using recent payslips or regular salary credits with accountant verification, reducing reliance on historical financial statements.
- Low-Doc Loans:
- These cater to borrowers who cannot meet standard documentation requirements, using alternatives like BAS or business accounts. They often come with higher interest rates.
- Year-End Planning:
- Borrowers are advised to review their financials with accountants and brokers before the financial year ends to align tax strategies with borrowing goals.
The podcast concludes with a reminder about a Q&A session in the next episode and encourages listeners to reach out for tailored advice.