Self Employed Mortgage advice
May 9th 2011 | 9:18 am
#1
Thread Starter
Forum Regular
Joined: Mar 2009
Posts: 157
Self Employed Mortgage advice
Can anyone shed any light on the dreaded subject of mortgages 
I apologise now if I am going to ask/say/type/think anything dumb so here goes.....
If you arrive in Australia with intention of being self employed (as a joiner or counsellor - any general advice also welcome) will you:-
Be able to get a mortgage?
Be entitled to the first time buyers grant (unsure if it is actually called that)
What is the average deposit generally being asked for by banks?
Many thanks
I apologise now if I am going to ask/say/type/think anything dumb so here goes.....If you arrive in Australia with intention of being self employed (as a joiner or counsellor - any general advice also welcome) will you:-
Be able to get a mortgage?
Be entitled to the first time buyers grant (unsure if it is actually called that)
What is the average deposit generally being asked for by banks?
Many thanks
May 9th 2011 | 10:30 pm
#2
BE Enthusiast
Joined: Jan 2007
Posts: 446
From: Watford, UK and now Hervey Bay
Re: Self Employed Mortgage advice
Hi,
I work for one of the major banks and the following general rules apply although every lender is different:
- We will lend up to 95% of the value of the home if you have been a customer for over 6 months so you only need a 5% deposit, but if you need to borrow 80% or more of the propertys value then it is compulsory for you to take out Lenders Mortgage Insurance that insures us (the lender) against you defaulting on your loan.
- With regards to being self employed, we require you to have been self employed for 2 years, and we need to see 1 years full tax return done by an accountant dated within the last 18 months. (So currently we are only accepting tax returns for the tax year ended 30th June 2010.)
- However its also worth noting that if you only need to borrow 60% or less of the propertys value then we will only require 12 months BAS statements to give you a home loan if you are self employed. (BAS= Business Activity Statements, done quarterly by some self employed people.)
Everything is open to interpretation: our rules state you must have been self employed for 2 years, however my hubby had only been self employed for 9 months when we got our home loan but he had been in exactly the same line of work for the year previous to that, and I was staff.
Sometimes going to a broker can be useful cos they'll know the ins and outs of every lender.
Hope this helps. Good luck with everything.
I work for one of the major banks and the following general rules apply although every lender is different:
- We will lend up to 95% of the value of the home if you have been a customer for over 6 months so you only need a 5% deposit, but if you need to borrow 80% or more of the propertys value then it is compulsory for you to take out Lenders Mortgage Insurance that insures us (the lender) against you defaulting on your loan.
- With regards to being self employed, we require you to have been self employed for 2 years, and we need to see 1 years full tax return done by an accountant dated within the last 18 months. (So currently we are only accepting tax returns for the tax year ended 30th June 2010.)
- However its also worth noting that if you only need to borrow 60% or less of the propertys value then we will only require 12 months BAS statements to give you a home loan if you are self employed. (BAS= Business Activity Statements, done quarterly by some self employed people.)
Everything is open to interpretation: our rules state you must have been self employed for 2 years, however my hubby had only been self employed for 9 months when we got our home loan but he had been in exactly the same line of work for the year previous to that, and I was staff.
Sometimes going to a broker can be useful cos they'll know the ins and outs of every lender.
Hope this helps. Good luck with everything.
May 9th 2011 | 10:43 pm
#3
Thread Starter
Forum Regular
Joined: Mar 2009
Posts: 157
Re: Self Employed Mortgage advice
Hi,
I work for one of the major banks and the following general rules apply although every lender is different:
- We will lend up to 95% of the value of the home if you have been a customer for over 6 months so you only need a 5% deposit, but if you need to borrow 80% or more of the propertys value then it is compulsory for you to take out Lenders Mortgage Insurance that insures us (the lender) against you defaulting on your loan.
- With regards to being self employed, we require you to have been self employed for 2 years, and we need to see 1 years full tax return done by an accountant dated within the last 18 months. (So currently we are only accepting tax returns for the tax year ended 30th June 2010.)
- However its also worth noting that if you only need to borrow 60% or less of the propertys value then we will only require 12 months BAS statements to give you a home loan if you are self employed. (BAS= Business Activity Statements, done quarterly by some self employed people.)
Everything is open to interpretation: our rules state you must have been self employed for 2 years, however my hubby had only been self employed for 9 months when we got our home loan but he had been in exactly the same line of work for the year previous to that, and I was staff.
Sometimes going to a broker can be useful cos they'll know the ins and outs of every lender.
Hope this helps. Good luck with everything.
I work for one of the major banks and the following general rules apply although every lender is different:
- We will lend up to 95% of the value of the home if you have been a customer for over 6 months so you only need a 5% deposit, but if you need to borrow 80% or more of the propertys value then it is compulsory for you to take out Lenders Mortgage Insurance that insures us (the lender) against you defaulting on your loan.
- With regards to being self employed, we require you to have been self employed for 2 years, and we need to see 1 years full tax return done by an accountant dated within the last 18 months. (So currently we are only accepting tax returns for the tax year ended 30th June 2010.)
- However its also worth noting that if you only need to borrow 60% or less of the propertys value then we will only require 12 months BAS statements to give you a home loan if you are self employed. (BAS= Business Activity Statements, done quarterly by some self employed people.)
Everything is open to interpretation: our rules state you must have been self employed for 2 years, however my hubby had only been self employed for 9 months when we got our home loan but he had been in exactly the same line of work for the year previous to that, and I was staff.
Sometimes going to a broker can be useful cos they'll know the ins and outs of every lender.
Hope this helps. Good luck with everything.
May 9th 2011 | 11:52 pm
#4
Joined: Dec 2007
Posts: 2,838
Re: Self Employed Mortgage advice
Your stumbling block there could be the BAS.What about going on the books, securing a mortgage,then going self employed when you're fixed up.
May 10th 2011 | 12:55 am
#5
BE Enthusiast
Joined: Jun 2008
Posts: 730
Re: Self Employed Mortgage advice
another option is set up a LTD company that way your are an employee. Downside being company taxes, added costs for accountancy etc!
May 10th 2011 | 1:00 am
#6
Thread Starter
Forum Regular
Joined: Mar 2009
Posts: 157
Re: Self Employed Mortgage advice
He has said he will find employment first if needs be. We should (hopefully) get our Visas in a couple of weeks time
so he and I can start looking for something.Thanks
May 10th 2011 | 1:02 am
#8
Thread Starter
Forum Regular
Joined: Mar 2009
Posts: 157
Re: Self Employed Mortgage advice
He doesn't earn enough to be LTD here so I am thinking it might be same there? He did look into it a while ago. His business is mainly domestic work so the customers dont want the added cost of VAT.
May 10th 2011 | 9:24 pm
#10
BE Enthusiast
Joined: Jan 2007
Posts: 446
From: Watford, UK and now Hervey Bay
Re: Self Employed Mortgage advice
Yep, the general rule of thumb is that if you own the limited company you have to show tax returns for the company, even if you are classed as an employee and are drawing a wage. Its a bit of a grey area but the government clamped down big time on lending in light of the GFC and we have to be seen to be lending responsibly at all times.
Re: the question about being a customer for 6 months, we mean you just have to have been running accounts with us for 6 months to be classed as a customer, and then we will lend to 95% of the propertys value with Lenders Mortgage Insurance.
By the way, in answer to one of the original questions, you are still entitled to the first home owners grant if you are self employed, your employment status has no bearing on that.
Re: the question about being a customer for 6 months, we mean you just have to have been running accounts with us for 6 months to be classed as a customer, and then we will lend to 95% of the propertys value with Lenders Mortgage Insurance.
By the way, in answer to one of the original questions, you are still entitled to the first home owners grant if you are self employed, your employment status has no bearing on that.
May 11th 2011 | 2:05 am
#11
Forum Regular
Joined: May 2009
Posts: 292
From: Essex but heading to Perth 2012!
Re: Self Employed Mortgage advice
Hi,
I work for one of the major banks and the following general rules apply although every lender is different:
- We will lend up to 95% of the value of the home if you have been a customer for over 6 months so you only need a 5% deposit, but if you need to borrow 80% or more of the propertys value then it is compulsory for you to take out Lenders Mortgage Insurance that insures us (the lender) against you defaulting on your loan.
- With regards to being self employed, we require you to have been self employed for 2 years, and we need to see 1 years full tax return done by an accountant dated within the last 18 months. (So currently we are only accepting tax returns for the tax year ended 30th June 2010.)
- However its also worth noting that if you only need to borrow 60% or less of the propertys value then we will only require 12 months BAS statements to give you a home loan if you are self employed. (BAS= Business Activity Statements, done quarterly by some self employed people.)
Everything is open to interpretation: our rules state you must have been self employed for 2 years, however my hubby had only been self employed for 9 months when we got our home loan but he had been in exactly the same line of work for the year previous to that, and I was staff.
Sometimes going to a broker can be useful cos they'll know the ins and outs of every lender.
Hope this helps. Good luck with everything.
I work for one of the major banks and the following general rules apply although every lender is different:
- We will lend up to 95% of the value of the home if you have been a customer for over 6 months so you only need a 5% deposit, but if you need to borrow 80% or more of the propertys value then it is compulsory for you to take out Lenders Mortgage Insurance that insures us (the lender) against you defaulting on your loan.
- With regards to being self employed, we require you to have been self employed for 2 years, and we need to see 1 years full tax return done by an accountant dated within the last 18 months. (So currently we are only accepting tax returns for the tax year ended 30th June 2010.)
- However its also worth noting that if you only need to borrow 60% or less of the propertys value then we will only require 12 months BAS statements to give you a home loan if you are self employed. (BAS= Business Activity Statements, done quarterly by some self employed people.)
Everything is open to interpretation: our rules state you must have been self employed for 2 years, however my hubby had only been self employed for 9 months when we got our home loan but he had been in exactly the same line of work for the year previous to that, and I was staff.
Sometimes going to a broker can be useful cos they'll know the ins and outs of every lender.
Hope this helps. Good luck with everything.
Just wanted to check that i have this correct, my OH is a carpenter by trade and had his own Ltd building company in Uk (which is now dissolved in preperation for the move), and now works as sole trader on self employed basis.
However, am i correct in thinking that unless we are mortgage free we are not able to buy in Oz for 2 years? Regardless of how much we may be able to pay up front? We probably would be looking to borrow between 25%-50% depending if we can sell both properties in Uk before we depart - for the money we anticipate that is !
May 11th 2011 | 8:14 am
#12
Account Closed
Joined: Oct 2008
Posts: 114
Re: Self Employed Mortgage advice
We're not that were wanting to buy a house over there straight away, just nice to know in case we did in time. And also are ltd companies over there totally different to here in the uk, hes only ltd here as its cheaper for him to be, i think i read somewhere on this thread that the vat threshold is 50,000 in australia where as its 70,000 here so thats a big difference. I struggle to get my head around the uk system, so dreading trying to understand something totally different.
Thanks
May 11th 2011 | 8:34 am
#13
Just Joined
Joined: Mar 2011
Posts: 14
Re: Self Employed Mortgage advice
with regards to the first time buyers grant, please can you confirm if you are required to be in the country for a certain period before you are applicable for this, and also what kind of amount???
this is the first we have heard of this, and although we plan to rent for the first couple of years its great to know about
this is the first we have heard of this, and although we plan to rent for the first couple of years its great to know about
May 11th 2011 | 2:04 pm
#14
Forum Regular
Joined: Feb 2006
Posts: 83
Re: Self Employed Mortgage advice
The GST threshold here is $75,000.
