Self employed refinance

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DeeO
Posts: 6
Joined: Mon Mar 15, 2010 11:06 pm

Self employed refinance

Postby DeeO » Mon Mar 15, 2010 11:17 pm

Hi everyone
My question is...
can the self employed get a traditional home loan
My husband and I Own 2 properties and we want to refinance our PPOR we owe $404000 and have exit fees of $12000..Our current homeloan provider didnt drop the interest rates when the rest of the banks were and so we are paying 11%(they didnt have a problem raising the interest rate when the rest of the banks are)
We originally had our property valued at $540000 but we have tried to refinance and due to the global economic crisis our property was valued at $470000. AS we are self employed the max LVR we could get was 80%
We have been selfemployed for about 3 or so years and have 2 good tax returns This year after expenses we earned about $110000 ....this includes depreciation on investment property and some creative accounting.
We have one main client and about 10 others
Can the self employed get 90% LVR
Thanks Heaps
Dee

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Otto Dargan
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Location: Sydney, Australia
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Re: Self employed refinance

Postby Otto Dargan » Tue Mar 16, 2010 7:37 am

Hi Dee,

If your income can be proven via tax returns then yes you can get a loan for 90% of the property value. You must have clear credit and a perfect repayment history on your existing loan otherwise refinancing will not be possible with a major lender.

Most self employed people are unaware that each bank assesses your income in a different way. Most either average two years tax returns, take 120% of the lower year or just use the lowest year. Added to this many bank employees cannot understand business financials as they have never run a business themselves.

We usually have a look at your two years financials and then work out from there how each lender would assess your income. In particular for your situation there are some lenders that just use the most recent years income rather than averaging it with previous years.

Assuming you can afford the loan and have clear credit then I believe we can help you. Please call us on 1300 889 743 for more info.
Otto Dargan
Mortgage Broker
P | 1300 889 743
Home Loan Experts

DeeO
Posts: 6
Joined: Mon Mar 15, 2010 11:06 pm

Re: Self employed refinance

Postby DeeO » Tue Mar 16, 2010 10:02 am

Thankyou for your reply

We do have good credit and have paid our loan well

We had 1 month were we contacted the bank and asked them to take out the loan repayment a few days later, which they did...Will this effect our chances?
also is the interest rate on a loan like this competitive?

Thanks
Dee

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Otto Dargan
Mortgage Specialist
Posts: 7600
Joined: Sat Sep 06, 2008 5:55 pm
Location: Sydney, Australia
Contact:

Re: Self employed refinance

Postby Otto Dargan » Tue Mar 16, 2010 10:40 am

Hi Dee,

That all sounds fine. I expect you may qualify for a prime loan at a rate in the range 6% to 6.5%. We would need to see the full details to be sure.

Thanks
Otto Dargan
Mortgage Broker
P | 1300 889 743
Home Loan Experts

DeeO
Posts: 6
Joined: Mon Mar 15, 2010 11:06 pm

Re: Self employed refinance

Postby DeeO » Wed Mar 17, 2010 7:21 pm

Thanks for that
We will hear from our accountant regarding our 08/09 tax soon and ill give you a call
Dee

User avatar
Otto Dargan
Mortgage Specialist
Posts: 7600
Joined: Sat Sep 06, 2008 5:55 pm
Location: Sydney, Australia
Contact:

Re: Self employed refinance

Postby Otto Dargan » Sat Mar 27, 2010 9:23 pm

There are some new low doc refinance loans available now that have lower rates and less restrictive criteria (no bas, no business bank statements etc). The main catch is that you need to prove what you are using the funds for.
Otto Dargan
Mortgage Broker
P | 1300 889 743
Home Loan Experts


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