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[MoreMore Insights] What Is Accountant Letter ?

Different from traditional mortgage applications, low doc applications do not require lots of paperwork when applying. In addition to self-declaring income, borrowers of low doc home loans may also be required to provide accountant letters as evidence of their self-declaration.

What Is Accountant Letter?

Like bank statements and business activity statements (BAS), accountant letter is also a way for self-employed borrowers to support their income claims. As the name suggests, an accountant's letter is a document signed by a fully qualified accountant. The accountant is confirming that the income declared by the borrower is honest and accurate.

Why Does the Bank Need Accountant Letter?

When assessing an application, the lender needs to be certain that they are assessing applicants' income and other aspects of the mortgage application. And a letter from accountant confirming their income will help clarify these issues.

Some small business owners may not have last two financial years' company and individual tax returns ready, by the time of mortgage application. Or maybe the company just started trading not long ago, and the company profit was not that good in the last year or two, and the tax return for the latest financial year has not started yet. Low doc loan applications are designed for these applicants.

Who Will Need Accountant Letter?

If you’re self-employed, and you find it difficult to provide your most recent tax returns to prove your income, or your financials can't accurately reflect your business income. Then the bank may ask you to provide an accountant letter.

Banks will also have certain requirements for the content of the accountant letter. For example, the letterhead of the accountant letter should have the company's details, including contact number and Australian business number (ABN), indicating the name of the person who signed the letter, signature and dated.

Please be advised that not all banks in the market can accept low doc loan applications. Contact your professional mortgage brokers at MoreMore Finance for more information.

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