Is there another way to prove my income besides payslips?

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gleeson
Posts: 58
Joined: Mon Jun 15, 2009 12:15 pm

Is there another way to prove my income besides payslips?

Post by gleeson »

Hello!
I want to buy a house worth $620,000 and need a home loan to make it happen. My friends were telling me that banks ask for payslips as a proof of income. I work for my family and don't receive payslips. Although I do have a legitimate income, I don’t know how I can get a loan without payslips.

Why are payslips so important? Isn’t there another way I can prove my income?

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Otto Dargan
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Re: Is there another way to prove my income besides payslips

Post by Otto Dargan »

Hi and welcome to the forums gleeson,

It is common to not receive any payslips from your employer especially if you work for your family. Most lenders ask for payslips as a proof of income because it provides essential information that the lenders need to take into consideration. They will see you as a higher risk if you cannot provide payslips.

The following are some of the reasons why lenders see payslip as a vital document:
  • Payslips are the most reliable form of verifying someone’s income.
  • The lenders can see the breakdown of normal, overtime, bonuses and commission income.
  • The lenders can use your Year to Date (YTD) income to calculate if your current income has been consistent throughout the financial year.
  • The lenders can see expenses such as tax, HECs, HELP and any debts you are paying direct from your pay such as salary packaging expenses.
  • The lenders can see whether someone is employed as a permanent or casual employee.
However, if you do not have payslips then you may be able to provide at least one of the following as an alternative ways to verify your income:
  • Employment letter.
  • Group certificate for the most recent year.
  • Tax return.
  • Bank statements for the last three months which shows regular payments into your account (payments must be very consistent).
Please note that these may only be accepted by a few lenders.

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

gleeson
Posts: 58
Joined: Mon Jun 15, 2009 12:15 pm

Re: Is there another way to prove my income besides payslips

Post by gleeson »

I’m sure getting the employment letter will not be that difficult. If I do provide the alternative form of income evidence, how much will I be able to borrow?

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Otto Dargan
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Posts: 7730
Joined: Sat Sep 06, 2008 5:55 pm
Location: Sydney, Australia
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Re: Is there another way to prove my income besides payslips

Post by Otto Dargan »

Hi gleeson,

The amount of money you can borrow may depend on your situation and the type of income verification you can provide such as:
  • Employment letter only: 80% of the property value i.e. 80% LVR.
  • Group certificate only: 80% LVR.
  • Tax return only: 80% LVR.
  • Notice of assessment only: 80% LVR.
  • Salary credits only: 90% LVR and up to 95% LVR for strong applicants.
  • Employment letter and a group certificate or tax return or notice of assessment: 90% LVR and up to 95% LVR for strong applicants.
According to NCCP Act, if you cannot provide any income evidence at all then you may not be able to get a home loan.

If you would like to know more about these then you can check out our website. We can also be reached on 1300 889 743 or you can fill in our free assessment form to see if you qualify for a loan or not.

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

gleeson
Posts: 58
Joined: Mon Jun 15, 2009 12:15 pm

Re: Is there another way to prove my income besides payslips

Post by gleeson »

Hmm…doesn’t sound so bad. Thanks for your help! :)

sandysmith
Posts: 47
Joined: Thu Jun 27, 2013 9:19 pm

Re: Is there another way to prove my income besides payslips

Post by sandysmith »

Hi there guys, I am also about to apply for a home loan. Luckily, I do have payslips to prove my income. But I’m not sure what kind of things banks look for in a payslip. Do banks look for particular info?

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

Re: Is there another way to prove my income besides payslips

Post by Otto Dargan »

Hi sandysmith,

Lenders will require your payslips to meet specific requirements. The following are the standard requirements:
  • It must be dated less than four weeks from the date of application. Old payslips may not be accepted.
  • It should include the employee’s name, year to date income, pay period details and the employer’s ABN / ACN number.
  • It must be computer generated using an accounting system. Handwritten pay advices or pay envelopes are not acceptable on their own.
  • All deductions should be explained.
MYOB or payslips produced from small business accounting software may be treated with caution.

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

sandysmith
Posts: 47
Joined: Thu Jun 27, 2013 9:19 pm

Re: Is there another way to prove my income besides payslips

Post by sandysmith »

Thanks for sharing this info. I will call you in a week or so to discuss my loan application with you.

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