Your accountant did their job. The bank read it as low income.
The work that minimises your tax is the same work that makes you look like a marginal borrower. Closing the gap between what you earn and what a credit assessor thinks you earn is specialist work, and it is most of what we do here.
A salaried applicant hands over three payslips and the assessment is simple. A self-employed applicant hands over two years of financials, and every line becomes a question. The income is real. Whether the lender can see it depends entirely on how the application is built.
Why the bank gets you wrong
A credit assessor reads your financials against a template designed for a salary earner. Depreciation, one-off expenses, shareholder salary, retained earnings, and home-office adjustments all reduce your taxable income. That is the point. But the assessor reads that reduced figure as the money you have to service a loan. It usually is not.
Two lenders will treat the same set of financials differently. One will add back depreciation and one will not. One will average two years and one will take the lower. One counts retained earnings in the company and one ignores them entirely. That difference can decide whether an application is approved or declined.
The add-backs that get missed
Much of the work is identifying the legitimate add-backs an assessor will accept, and evidencing them clearly:
- Depreciation. A non-cash expense most lenders will add back to your income, if it is presented correctly.
- One-off and non-recurring costs. A single large expense that will not repeat should not drag down the picture of your ongoing income.
- Shareholder salary and drawings. How you pay yourself out of a company changes what different lenders count.
- Retained profit. Money left in the business is income some lenders will recognise and others will not.
- Interest and rent paid to related entities. Frequently adjustable, frequently missed.
The two-year problem, and the way around it
Most lenders want two years of financials before they will lend to a self-employed borrower. If you have been trading for eighteen months, the mainstream answer is to wait. It is not always the only answer. Some lenders will consider one year with the right supporting evidence, and some non-bank lenders assess differently again. Whether that path is right for you depends on your position and your plan. We will tell you if the better move is to wait six months.
What we do
- We read your financials the way a credit team will. Then we build the case that shows your real income.
- We work with your accountant. The way the financials are prepared affects the lending, and it is better to have that conversation before the return is filed, not after.
- We choose the lender to match how you earn. The lender that adds back what another ignores.
- We submit once, with everything in order. A declined self-employed application is harder to recover than most.
- We are still here afterwards. At the next tax return, the next purchase, and the next change to your structure.
Common questions.
How many years of financials do I need?
Most lenders want two years of financial statements. Some will consider one year with the right supporting evidence. Every lender has its own rules.
Why does the bank say my income is lower than it is?
Lenders often start from your taxable income. Depreciation, one-off expenses and other adjustments reduce that figure, even though the money is available to you. Some lenders add these items back and some do not.
Should I talk to my accountant first?
Ideally, talk to us and your accountant together, before your next tax return is filed. How your financials are prepared can make a real difference to how lenders see your income.
Can I get a mortgage if I have just started my business?
It can be harder, but it is not always impossible. It depends on your industry, your history and the evidence you can provide. We can tell you what is realistic before you apply.
What clients say about working with Carl.
Carl was an absolute pleasure to work with. His knowledge, professionalism and prompt communication gave us confidence throughout our first home purchase. He secured us an excellent deal with Westpac and made the entire process seamless. We highly recommend Carl to anyone looking for a mortgage broker.
Three of us, all self employed, wanted to get a home loan for a shared house. Without the expertise, help and the precise instructions to fill in the various documents or organise specific items we would not have had a chance to get the mortgage over the finish line. Carl was extraordinarily helpful and always found a way to continue this not so easy application. I can highly recommend Carl. Very grateful for his assistance.
Carl was fantastic to work with. Our mortgage application was not straightforward as we were multiple people, all self employed with new businesses. We had tried using other brokers but they weren't able to get our approval across the line. Carl was tenacious with the banks, and had so much knowledge he was able to guide us through all the information we required and how to present it. After a difficult process he was able to secure us a mortgage with very favourable terms. I couldn't recommend him enough, the effort and work he puts in is second to none!
Carl Mann is a fantastic mortgage broker. He is knowledgeable, professional, and has excellent communication. Carl kept us updated along the way and provided sound advice. I would definitely recommend Carl to anyone needing assistance with mortgage finance or refinancing.
Carl helped us work through the finance for our next investment property without losing sight of our existing lending. He understood what we were trying to build over the longer term and worked through the different options with us before we made an offer. That preparation made the purchase much smoother.
Development finance was very different from arranging a normal mortgage. Carl understood the feasibility, valuations, build costs and timing the lender needed to see, and helped us get everything organised before it went to credit. Having someone who understood the development side of the deal saved a lot of back and forth.
We were purchasing premises for our business and needed someone who could look at both the property and the strength of the business behind it. Carl worked through the numbers with us, explained what the lenders would focus on and helped structure the application properly from the start.
Bring the financials the bank misread.
We will tell you what your real, lendable income looks like, and which lender will see it.
Every conversation is confidential.
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