Are you self employed and wanting to buy a house?

Are you a self employed builder? Then you need to read this. It’s really common for someone in your position to be earning $45 per hour and this is going to give you an annual income of around $95,000.

Builders and their accountants are notoriously good at writing plenty of expenses into their business and that means you aren’t going to have to pay a lot on your income tax. This is a bad thing if you are wanting to borrow money from the bank to buy a home.  

When the bank is proving that you can afford to pay off a mortgage, they are only going to test your affordability based on your taxable income. Though if you have written a lot of expenses into your business and your income goes from $95,000 down to $55,000 or $65,000, that’s going to drastically reduce how much you can borrow for your home purchase.

If it’s time to adult and buy your first home, it’s definitely worth looking at trying to reduce some of those expenses that you put through the books. This is going to increase the amount of tax you are going to pay, but it’s also going to mean you can borrow more from the bank.

If you are used to picking up and swinging a hammer, but aren’t so sure what’s going on with your financials, give me a call and I can give you instructions on what to do for the next 12 or 24 months. Contact me today on 021 662 205 or email ryan.amoore@loanmarket.co.nz