Employed by family

Any general questions you might have in regards to loans and finance.
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greg
Posts: 1
Joined: Tue Aug 10, 2010 6:08 pm

Employed by family

Post by greg »

Hi Otto,

When applying for a loan some lenders require payslips and/or tax and/or statements etc etc..

As proof of income I can provide payslips, however I am full-time employed by my family and their name is the business name on the payslip (which is the same as my surname). Will the bank reject because of this same name issue?

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Otto Dargan
Mortgage Specialist
Posts: 7730
Joined: Sat Sep 06, 2008 5:55 pm
Location: Sydney, Australia
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Re: Employed by family

Post by Otto Dargan »

Hi Greg,

We help many people who work for a family business to apply for a home loan. Lenders are always concerned about people who have a close relationship with their employer as it is easy for them to provide payslips showing a higher income than they are actually receiving. The majority of lenders complete searches on your employer to look up who the directors are, so even if your family's name isn't in the business name they often still know if you work for your family or not.

Most lenders will ask for a document from an external source to prove your income. Tax returns as well as notices of assessment are the most common requested document. However in many cases these do not reflect your true income due to holidays or changes in hours or they may not be available because you have only recently started your job.

There are several alternative methods of verifying your income:

* Provide three months bank statements showing your pay being deposited into your account.
* Provide a letter from the company accountant confirming the date you started and your gross income. Note that many accountants are (quite rightly) hesitant to write this kind of letter as it is not their area of responsibility.
* If you are borrowing less than 80% of the property value then you may only need to show a letter from your employer as proof of income. Note that one of our lenders can accept this however they can ask for notices of assessment at their discretion. I have not seen them ask for additional documents however it is always possible.
* If you are borrowing less than 60% of the property value then one of our lenders does not require any proof of income for people employed by their family. This is known as a PAYG low doc loan.

The interest rates for all of these options are excellent and the loans are all with major lenders. We usually discuss your situation with you in detail and find out which documents you can provide. We will then match you to a lender who can accept the documents that you have.

People often make the mistake of trying to get a lender who always requires notices of assessment to accept their loan. Applying with the right lender is the key to getting approved.

Please give us a call on 1300 889 743 and we'll help you to find a solution.
Otto Dargan
Mortgage Broker
P | 1300 889 743
Home Loan Experts

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Otto Dargan
Mortgage Specialist
Posts: 7730
Joined: Sat Sep 06, 2008 5:55 pm
Location: Sydney, Australia
Contact:

Re: Employed by family

Post by Otto Dargan »

Hi Pango

The best way to verify your income is to use salary credits to your bank account. We have a special program that can use will complete a view only access of your cheque account and create a report which verifies the frequency and amount of payments received. This is the easiest way. Just call us on 1300889743 and ask for Vivienne and she can take care of this for you.

As for other methods we can sometimes use a letter from the family company accountant. It just depends on the nature of the evidence available.

Each lender has their own requirements. We usually identify what evidence is available first, then what lenders can accept that evidence (it varies a lot!) and then work out which of those lenders is the best fit for you.
Otto Dargan
Mortgage Broker
P | 1300 889 743
Home Loan Experts

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