Even if proving your small company income to a lender is more complicated than presenting pay stubs, you can still apply for a mortgage. There are a few things you can do to make the application process for a house loan as easy as possible.
Bring your own finances into order.
A small amount of planning can go a long way when it comes to saving for a down payment and acquiring the necessary tradie business coach in melbourne. To get started:
Examine your budget to determine whether you can do more to generate regular saves and reduce your debt. Saving more now will help you amass a larger down payment, and a solid history of consistent savings and on-time debt repayments could have a significant impact on your borrowing capacity when you apply for a loan.
Pursue any unpaid invoices to maximize your earnings.
Ensure that your personal and business money are distinct. Keep in mind that unless you are a sole proprietor and borrow in your own name, money retained within your business structure cannot be recognized as an asset.
Reduce your personal debts, such as credit card balances. Consider canceling or decreasing the limit on any unused overdrafts or credit cards. The lesser your existing debt and the better your credit history, the more likely you are to get approved for financing.
Discuss with your accountant any additional steps you might take to organize your accounts and demonstrate the robustness of your business's earnings.
You must be able to demonstrate the capacity to manage your finances and satisfy existing obligations and loan repayments on time. As part of the application process, lenders will review your credit history. Online credit reporting firms provide access to a free copy of your credit report. Your application will also benefit from a good history of consistent savings.
Know your statistics
Lenders will want to know how much you earn, your ability to service debt, and whether you have a history of making regular payments into a savings account if you own your own business and experience income changes.
To increase your chances of acceptance, you'll need to demonstrate that your business has been operating steadily, and the more current and accurate your documents, the better.
Prepare your paperwork
Whether you choose to submit your home loan application in person or online, you will be required to provide a variety of papers.
This includes your passport, driver's license, and birth certificate in addition to non-photographic identification such as a utility bill.
Earnings statements: Bring along your:
Personal tax returns for the two most recent years along with the most recent ATO Notice of Assessment or a letter from your accountant confirming the tax returns are final and have been lodged with the ATO; Most recent business tax return and business financial statements detailing the past two years' profit and loss.
If you do not have this information, please discuss alternative possibilities with us and inquire about our streamlined verification process if you regularly pay yourself a wage.
This can contain bank account statements as well as information regarding personal and/or credit loans and debts, current investments (such as term deposits and shares), existing assets (such as a car), and regular outgoings.
Other earnings: If you earn rental income or get government payments, please supply the appropriate documentation to demonstrate this.
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