If you’re looking into applying for low doc home loans, chances are you’ve seen the list of criteria required to successfully apply – including something called an Australian Business Number. These are often one of the most important aspects of the application and can mean the difference between success and failure.
What is an Australian Business Number?
An Australian Business Number (ABN) is a registration number of companies within the Australian tax system. The unique 11 digit code is used on all financial documents dealing with customers and business, and other transactions that come to and from your business. There are consequences for not including this – for example, other businesses can potentially withhold 46.5 per cent of any payment for tax purposes.
It also acts as an identifier within government agencies in order to streamline any requests or documents being sent through the system. Having an ABN is the best way of proving your business is legitimate due to the necessity of tax payments and due process involved.
Why do you need your Australian Business Number for a low doc loan?
Self-employed individuals are some of the main recipients of low doc home loans. This is simply because – due to their working status – they are often unable to provide the necessary paperwork that is asked for during a home loan application.
Therefore, low doc applications often ask for a valid ABN that has been in existence for at least six months (preferably 12 months) in order to verify that the potential recipient of the mortgage has a steady income and can prove their employment status.
Acting as proof of the individual’s validity as a working citizen, the ABN becomes an important document for lenders to have during their decision-making process. If you’re interested in discussing low doc home loans with an expert, get in touch with the team at Redrock today.