St George - accountant letter not accepted for a home loan

[Abe]

Hi, I’m self-employed with an ABN which is active but not trading. I applied with St George for a home loan but the bank will not accept me having a shelf company that is not trading. I had provided a letter from my accountant declaring the same but they wouldn’t accept it.
What should I do?

[Otto Dargan]

Hello Abe. Welcome to the forums.

That’s St George’s new policy for self-employed borrowers - they no longer accept an accountant’s letter for a company that is not trading.

Their new policy states that:

• If the company is not trading, a letter stating it’s not trading and has no liabilities is not good enough.
• If it’s a holding company then you must state this, otherwise, if it’s a company which is just parked there then essentially if you have no returns then it is not going to work out.

You would either need to cancel the ABN (Australian Business Number) or apply with another lender that still accepts an accountant’s letter.
There are a few banks and lenders that can do this who are offering competitive interest rates and that’s who we’re working with.

Give us a call on 1300 889 743 or fill in our free assessment form to find out if you qualify for a home loan.

Cheers,

[Abe]

The main reason that I applied with St George, to begin with, was because I was told that they accepted this structure and their competitive fixed rates. So, what kind of fixed rates are available with these other banks/ lenders?

[Otto Dargan]

Hi Abe,

The current record-low cash rate environment has led to the banks offering home loan interest rates below 3% p.a. Some of our lenders are offering sharp fixed rates for 1, 3 and 5 years.

Cheers,

[Abe]

Thanks for the info. With cash rate expected to drop further would you recommend fixing my mortgage? If so, for how long?

[Otto Dargan]

Hi Abe,

Yes, it’s true that many experts are forecasting a further cash rate cut, but it is unclear how much of that is expected to be passed on to home loan borrowers. ‘To fix your home loan or not’ is a question we get all the time.

It largely depends on your financial goals and needs. Generally, you shouldn’t fix your loan if you:

• Plan to refinance your home loan or sell the property within the fixed term.
• Make large extra repayments on your home loan.
• Plan to renovate or access the equity in your property.
• Don’t like being stuck with a particular lender or product.

As we have almost 40 lenders on our panel, we can get you a highly competitive interest rate on your home loan and will also periodically review whether or not you’re getting a competitive rate on your home loan.

Give us a call on 1300 889 743 or fill in our free assessment form to discuss your needs today.

Cheers,