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Can I get a home loan without providing my tax returns?

Posted: Tue Mar 29, 2016 3:57 pm
by Nico Robin
I've been working as a freelance photographer for the last 3 years. I have saved some money towards purchasing a home and now I'm looking for a property in the beautiful neighborhood of Fortitude valley in the range of $300-350,000. My income varies from $60-70k per annum and I have a clear credit history.

My friend has suggested that banks are not keen to provide home loans to people without tax returns. Can anybody at this forum tell me if this is true and whether or not I’m eligible for a home loan?

Re: Can I get a home loan without providing my tax returns?

Posted: Wed Mar 30, 2016 9:23 am
by Otto Dargan
Hello Nico Robin. Welcome to the forums.

Freelancers tend to have a hard time getting approved for a home loan mainly due to the strict requirements set for the self employed or those who run their own business. However, by applying with the right lender, you can get better home loan deals despite being a freelancer.

If proving your income through traditional means such as tax returns is difficult for you then getting a low doc home loan may be an alternate option because you can get it without providing any recent tax returns.

There are other ways to prove your income besides using tax returns. You may provide last years’ financial statements (Profit & Loss and Balance sheet), last years’ personal tax returns or last years’ notices of assessment.

Most lenders require you to be self-employed for at least two years. Although very rare, there are some specialist lenders who may consider people who have been self employed for just a day.

Cheers,
Otto

Re: Can I get a home loan without providing my tax returns?

Posted: Thu Mar 31, 2016 6:28 pm
by Nico Robin
Thanks for that Otto. How much can I borrow for this property?

Re: Can I get a home loan without providing my tax returns?

Posted: Fri Apr 01, 2016 10:02 am
by Otto Dargan
Hi Nico Robin,

Since freelancers tend to have inconsistent income compared to PAYG individuals, lenders may often reduce your borrowing capacity.

We have some lenders who accept two years financial statements without tax returns and lend up to 80% of the property value, however they require the following:
  • Two years financial statements.
  • The financial statements should be prepared by an accountant and it shouldn’t be a draft.
  • You don’t need to provide tax returns or notice of assessment.
More information regarding self-employed home loans as well as add backs can be found on our website. You can also ring us on 1300 889 743 to discuss your personal situation regarding the home loan. You can enquire online to check if you may be eligible for a loan or not.

Cheers,
Otto

Re: Can I get a home loan without providing my tax returns?

Posted: Fri Apr 01, 2016 7:49 pm
by Nico Robin
It sounds more complicated than I’d assumed. I’ll ring you guys to know more about this. Bye for now.

Re: Can I get a home loan without providing my tax returns?

Posted: Mon Apr 04, 2016 7:36 pm
by Mean Green
We were also thinking of buying a house and will need to take out a low doc loan. We’re planning to borrow about $450,000 for a property worth $600,000. We had other things planned, but I hadn’t considered LMI. How much LMI may I possible have to pay?

Re: Can I get a home loan without providing my tax returns?

Posted: Tue Apr 05, 2016 10:53 am
by Otto Dargan
Hi Mean Green,

The size of LMI premium usually varies across different lenders and insurance providers. Basically though, it depends on the LVR (Loan to Value ratio), and the higher the loan amount, the higher will be the LMI premium. You can refer to the LMI calculator to get an estimate on the LMI premium you may be required to pay.

Cheers,
Otto

Re: Can I get a home loan without providing my tax returns?

Posted: Wed Apr 06, 2016 8:19 am
by Mean Green
Thanks for that info Otto. I’ll speak to you guys shortly. Cheers!