A crucial aspect of residential home lending for business owners is the significance of keeping your business financials up to date. In recent years, banks have become increasingly stringent about ensuring that businesses have current financial records, especially as the end of the financial year approaches. In this blog post, I'll delve into why having up-to-date financials is vital for business owners, particularly those considering property purchases in the coming months.
Navigating the Changing Landscape:
Banks are now requesting profit and loss statements for the current financial year before its end in March. Moreover, they are also seeking full financials from the previous year. Once April 1st arrives, banks require comprehensive financial statements. If you're a self-employed individual planning to buy property within the next three to six months, it's crucial to work with your accountant to ensure your business financials are sorted promptly.
Getting Ahead of the Game:
To streamline the process, inform your accountant as early as possible about your plans to purchase property. This proactive approach allows them to be prepared and ensures you can provide all necessary information promptly. Timing is key, especially when it comes to meeting the banks' requirements for up-to-date financial documentation.
Considerations for Business Owners:
Banks only recognise income that has had tax paid on it and is reflected in your financials. If you receive drawings from your company without corresponding shareholder salary or documented in your financials, the bank may not consider it as usable income. It's essential to align your financials with your income goals, including net profit or shareholders' remuneration. Engaging in a discussion with your accountant about your objectives helps ensure that your financials accurately reflect your financial situation.
Connect with Us for Personalized Assistance:
If you're navigating the complexities of business financials and considering a property purchase, feel free to give us a call. Our team at My Mortgage is here to help you work through the specifics of your situation. We understand the importance of having the right financial information to provide you with the best options tailored to your needs.
For business owners, maintaining up-to-date financials is not just a compliance requirement; it's a strategic move. As banks tighten their scrutiny, being proactive about your financial documentation can significantly impact your ability to secure the options you want. Whether you're planning a property purchase or simply want to ensure your financials are in top shape, connect with us at My Mortgage. We're here to guide you through the process and help you make informed decisions for a successful financial future.