How do I prove my investment income to the banks?

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nightelf
Posts: 8
Joined: Wed Apr 06, 2016 2:29 pm

How do I prove my investment income to the banks?

Post by nightelf »

I earn a lot in investment income and I'd like to use this income to buy a house. I'm not sure exactly how to prove my investment income so can anyone explain this explicitly to me? Any help would be much appreciated.

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Otto Dargan
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Re: How do I prove my investment income to the banks?

Post by Otto Dargan »

Hello nightelf.

Welcome to the forums.

There are many ways you can prove your investment income for a home loan, which will depend on the bank you're going with.

Generally, you're required to provide printouts of your portfolio and two years' tax returns to show that your investment income is consistent and ongoing. However, there are some lenders that may allow you to borrow even with just a single tax return.

There are also lenders who can settle for expected return documents, which is conservative though, at around 4%.

Please note that you will have to be earning currently from that asset so if you have sold it off then it will not be accepted.

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

nightelf
Posts: 8
Joined: Wed Apr 06, 2016 2:29 pm

Re: How do I prove my investment income to the banks?

Post by nightelf »

Thanks for that. I have no problems with using two of my previous years' tax returns. Will likely call to get a few things clarified though. Bye.

rockstar
Posts: 9
Joined: Sun Dec 13, 2015 7:40 am

Re: How do I prove my investment income to the banks?

Post by rockstar »

Hello, I earn a lot through dividends but I can only provide one tax return. Is this acceptable or should I have to prove my income some other way?

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Otto Dargan
Mortgage Specialist
Posts: 7729
Joined: Sat Sep 06, 2008 5:55 pm
Location: Sydney, Australia
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Re: How do I prove my investment income to the banks?

Post by Otto Dargan »

Hi rockstar,

Dividends are considered to be relatively reliable by most banks as it is seen as low risk ongoing income, but if you have just one or two shares then it will most likely be an issue.

One of our lenders can accept just one tax return to prove the income that you earn from dividends. If you've only recently purchased the shares then some lenders can use an expected return too.

However, it should be noted that day trading and capital gains income is often excluded from assessments.

If your dividend income exceeds 25% of your total income then some banks will consider you self employed and may require an accountant's letter.

If for some reason, you aren't able to prove your income then a low doc loan can still be an option.

You can learn more about all this on our website. You can also discuss things directly with one of our investment income home loan specialists by calling us on 1300 889 743 or you can enquire online.

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

rockstar
Posts: 9
Joined: Sun Dec 13, 2015 7:40 am

Re: How do I prove my investment income to the banks?

Post by rockstar »

Interesting… my dividend income probably constitutes around 12-15% of my total income but I will discuss this with my accountant and have a letter ready anyway. Thanks!

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