Partner in an accounting company, need a home loan

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Don Juan
Posts: 45
Joined: Wed Jul 03, 2013 2:10 pm

Partner in an accounting company, need a home loan

Post by Don Juan »

Hi

I am a partner in an accounting firm looking to get a home loan. I applied with my bank for the loan but the banker assigned to me was not very positive about my chances of approval because he said that I was self-employed, when in fact I am not. Anyway to cut a long story short, he said that it was not a good idea to apply for a home loan in my situation.

I would appreciate it if you could shed some light on this matter.

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Otto Dargan
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Re: Partner in an accounting company, need a home loan

Post by Otto Dargan »

Hi and welcome to the forums Don Juan,

Yes it can be difficult for accounting partners to get a home loan since the lenders may not have any specific policies regarding loans to people in your situation. The problem is that since you are a partner and therefore a part owner in the business, you will be assessed as a self-employed borrower.

Usually the lenders will require you to submit the financial statements and tax returns for all businesses that you have a share in if it generates more than 25% of your income (from salary, director’s fees or dividends). While this may be the usual bank policy, we can help you get this requirement waived for your application.

Furthermore we can also help you negotiate for a significant discount on your interest rate. This is possible if you are borrowing over $1 million which should be less than 80% of the property value and you have a high income.

Accountants can even get their LMI fee waived if they are borrowing over 80% of the property value if:
  • Your loan amount is less than $2 million
  • You are borrowing less than 90% of the property value
  • You are a member of the relevant industry organisation
  • You are an Accountant, Finance Manager, Auditor or an Actuary
  • You are earning over $150,000 per annum or you will be earning a similar amount soon
Cheers,
Otto
Otto Dargan
Mortgage Broker
P | 1300 889 743
Home Loan Experts

Don Juan
Posts: 45
Joined: Wed Jul 03, 2013 2:10 pm

Re: Partner in an accounting company, need a home loan

Post by Don Juan »

So what documents do I need to submit with my application then? Will my payslips be enough or do I need more?

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Otto Dargan
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Re: Partner in an accounting company, need a home loan

Post by Otto Dargan »

Hi Don Juan,

You can submit your personal tax returns and notices of assessments from the last two years. If you are earning enough to borrow as much as you need then you can also submit your two most recent payslips.

Please keep in mind that if you are a partner in a larger accounting firm then you can provide a letter or email from your company’s Administration Manager (or the equivalent) as proof of your income which can be used to verify your income.

These larger firms include:
  • Ernst & Young
  • KPMG
  • Minter Ellison
  • Allens Arthur Robinson
  • Gadens
  • Henry Davis York
  • Corrs Chambers Westgarth
  • Freehills
  • Mallesons Stephen Jacques
  • Clayton Utz
  • PKF
  • PWC
  • Deloitte
  • McGrath Nicol
  • Grant Thornton
If you need further help for your home loan then you can speak to us directly on 1300 889 743 or send us an online enquiry.

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

Don Juan
Posts: 45
Joined: Wed Jul 03, 2013 2:10 pm

Re: Partner in an accounting company, need a home loan

Post by Don Juan »

Thank you for the information. I will look into this in more detail with an investor friend and see how he handles it before I make any decisions.

neverever
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Joined: Thu Jul 25, 2013 3:50 am

Re: Partner in an accounting company, need a home loan

Post by neverever »

I was researching ways to get cheaper LMIs when I found this thread. I’m not an accounting partner in a large firm or anything so is it impossible for normal folks like me to get a discount?

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Otto Dargan
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Re: Partner in an accounting company, need a home loan

Post by Otto Dargan »

Hi Neverever,

The discounts mentioned above are for doctors, lawyers, accountants and engineers.

If you are not in any of the above professions then you can still get a reduced LMI if:
  • You have saved up 5% of the property value in genuine savings
  • You are buying a property (and not refinancing)
  • The property you are buying is located in a capital city or a major regional centre
  • Your credit history is perfect and you have been paying all your currents debts on time every time
  • Your loan amount is less than $800,000
  • You are borrowing less than 80% of the property value
  • You have been working in your current job for two years at the least and your co-borrower / partner has been working at their current job for six months
If you can satisfy all of the above conditions then we can help negotiate a discounted LMI for your application.

Can you also tell me if this is your first home and how much you are borrowing?

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

neverever
Posts: 33
Joined: Thu Jul 25, 2013 3:50 am

Re: Partner in an accounting company, need a home loan

Post by neverever »

Hi Otto,

Yes this is my first house (I am buying it on my own). The house is going for $630,000 and I have more than $100,000 in my savings, so maybe I will borrow about $530,000.

Why did you ask this?

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Otto Dargan
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Re: Partner in an accounting company, need a home loan

Post by Otto Dargan »

Neverever, first of all, some mortgage insurers have a special offer for first home buyers where you can receive a 15% discount on your LMI fee although this is only possible if you have genuine savings and your loan amount is less than $600,000.

Furthermore, usually you would have to pay an LMI fee if your loan amount was more than 80% of the property value ($530,000 of $630,000 is 84.13%), however we have a special agreement with two of our lenders who can approve a home loan up to 85% of the property value without charging you an LMI fee.

In this case you would have to make sure that you have a perfect credit history and that you meet the lender’s other requirements.

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

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