Business owners and self employed

Introduction

This page offers some background on what is now required of self employed borrowers and business owners who apply for a mortgage.  It should be read in conjunction with other relevant pages (e.g. first home buyer). 

Low doc home loans

The low doc mortgage products, that were offered by banks and others before the credit crisis, have effectively been withdrawn.  Although the product category still 'exists' it is no longer acceptable to self-certify your income without verification.  This means that we are once-again checking financial statements, GST returns and other records to ensure that you have sufficient income to meet lenders' credit criteria.

Loan to value ratio (LVR)

LVR's for Low doc loans are lower than traditional income verified lending.  Often it is worth 'going the distance' to verify income and avoiding the low doc mortgage criteria. 

In cases where we cannot verify income to the lenders' satisfaction, LVRs may be restricted from between 50% LVR and 70% LVR depending on property type and location, and other more subjective factors. 

Unfortunately we cannot be more specific until we have reviewed a proposal, so it is best to complete our loan application so we can make a proper assessment. 

To verify your earnings

For businesses with 24 months plus trading history:

1. Financial statements prepared by a chartered accountant.
   
2. IRD Income tax returns.
   

For businesses with less than 24 months trading history:

1. For the most recent financial year ended; financial statements prepared by a chartered accountant.
   
2. For the period since the most recent financial year ended; GST Returns for the business, including IRD's GST Returns acknowlegement and IRD's GST Statements of account.  
3. IRD Income tax returns
   

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