Some background on the current situation with lending
Since the financial meltdown and real estate crisis of 2008 that affected most of the world in some way or other the leading banks had to make some drastic changes to their policies over who to lend their (or their shareholders) money to. These changes are making it harder for the hard working self-employed to now secure a self-employed loan for the home of their dreams or a business loan to extend the business they may have been building up for years.
Self Employed lending? Does your business have a history?
When you go to the bank for a loan they generally require that your business has a history of at least two years and this includes all the financial records for at least that period, preferably longer. There was a time when you could walk into a bank and pretty much get the deal you wanted with little or no fuss, as long as you had enough security to cover. Sadly, those days are long gone and now the banks and other possible lenders want proof of your ability to pay back the loan over a long time. They want to see your tax documents, income and expenditure anything to verify your level of income. Another thing is the banks are not quick to make a decision and all of this can lead to a frustrating few weeks of constantly going back and forth.
As an example, the banks are looking for a pattern such as do you always pay your bills on time, this may well determine whether your loan application is approved. If you have had a business for several years with stability in your bank records and have a good credit rating, you have a better chance to be approved.
Our services as MyMoney mortgage adviser include that we approach banks and other possible lenders on your behalf and get the deal completed for you and you are not losing valuable time when you should be out there earning money instead of working on your self-employed home loan.
Knowing the paperwork for business finance applications
When you get in contact with a bank or lender to apply for a loan, one of the biggest obstacles is the paperwork you must initially complete and if you complete it incorrectly your loan may be refused on that detail alone. Each bank or lender has its own requirements so what you take to one bank may not be sufficient for the next one.
If you can go to the lenders and confidently give them the required paperwork and any additional documents, getting a loan is much easier. This is where I step in as your experienced mortgage broker based in Auckland, I know exactly what it is each bank requires and can determine which lender or bank is the best one to approach for your loan. I will do all the running around, hard work and research for you.
Self-Employed Lending: Consider taking a tax hit
One advantage of being self employed is the huge range of things you can deduct from your taxes. However, should you drive down your tax bill too much those deductions may make it difficult to secure a mortgage through a bank. If throughout the year you keep your taxable income low that becomes a negative point as the lender looks at your gross taxable income some huge write-offs will work against you.
Using a mortgage or financial advisor you can offset those expenses to satisfy the bank and then claim those expenses later.
If you are the owner of a company and are in the market for buying a new home, buying business premises you previously rented, arrange a meeting and come and talk to us as we are experts in the mortgage adviser market and are confident of finding solutions and getting you the self-employed (home) loan you need.
We are here to help you ensure your business has the finance it needs to grow.