38 - Unlocking How Banks Assess Self Employed Income

If you're self-employed, banks will usually need more from you before they'll lend compared to a PAYG employee. Understanding what banks are looking for means you can present your income in the best possible way and set yourself up for success.In this episode, Jack Elliott and Chris Bates break down how banks assess self-employed income. We talk through the standard two year approach, why one year financials could significantly increase your borrowing capacity, what your options are if your ABN is less than two years old, and how the director wages pathway could change what you're able to borrow.We also cover the tension between tax minimisation and borrowing capacity, why speaking to a broker before you lodge your tax return matters, and how connecting your broker and accountant early can help you find the right balance between both.In this episode:🔑 How banks assess self-employed income using two years of financials🔑 Why one year financials could significantly increase your borrowing capacity🔑 What your options are if your ABN is less than two years old🔑 How the director wages pathway could change what you're able to borrow🔑 Why speaking to a broker before you lodge your tax return is so importantTimestamps Timestamps 00:00 - Budget Changes: What We're Seeing for First Home Buyers01:36 - Introduction to Self Employed Income Assessment04:09 - The Standard Two Year Approach04:41 - Balancing Tax Minimisation and Net Profit07:20 - One Year Financials Policy with Example09:18 - Protecting Yourself as a Self Employed Buyer12:07 - Director Wages Policy14:57 - What If Your ABN Is Less Than Two Years Old?17:36 - Business Debts and Addbacks19:41 - Getting the Best Outcomes as a Self Employed Buyer22:19 - The Tax Return Trap24:25 - Getting the Right Team Around YouFree ResourcesDownload Your How Banks Assess Self Employed Income ResourceWant to keep the conversation going? 👉 Join the First Home Unlocked Facebook Community📅 Book a chat with Jack for tailored support📱Follow Us on social media: Instagram, TikTok, Youtubefirsthomeunlocked.com.au