Accountant Letter for a Home Loan

swapup on 01/12/2020 - 16:26

Hi folks

My brother is applying for a personal (home) loan, and have been asked to get an accountant letter to state that there is no outstanding liability against the business he recently started. Can a family member who works as an accountant produce the letter for him?

Otherwise, what would be the cheapest way to obtain the letter? His business has literally just started, has expenses totally a few thousand dollars, so he doesn't seem to need any additional accounting service at this stage.

Would you shed some light on this please? Heaps appreciated.

Financial

Comments

  • bigballerbrand on 01/12/2020 - 16:31
    +3

    The letter has to be from his accountant. The same accountant that is on his tax returns etc.

    Also, the loan going ahead or not hinges on the accountant letter and trying to get the "cheapest" way to obtain the letter is not the right thinking.

    Ask the accountant to do it. Your accountant won't normally charge for a letter like this and if they do it would be $100 max.

    If they don't have an accountant and the business has just started, then you're in a bit of a pickle.

    • swapup on 01/12/2020 - 17:01

      Thanks for the input. Yes it has JUST started, and he has not hired a business accountant. He does his own tax returns too, so I really wasn't sure where to direct him.

      • bigballerbrand on 01/12/2020 - 17:04
        +1

        you can explain that to the bank. a registered tax agent/ qualified accountant who doesn't know the client well will not create that letter for the client.

        if you have a family friend who is a tax agent (on the tax practitioners website you can search tax agents) and they are happy to put it on their letterhead then it should be fine as you can say that accountant is the client's accountant.

        if not, you can call accountants until one is happy to do it (they will not only charge for their time but also because they are doing a letter that not many others will do) so expect a fee between $250 up to $500.

        be careful that the letter isn't reqiured to say that "the client has been a client of mine(the accountant) for more than 12 months"

    • whooah1979 on 01/12/2020 - 19:18

      The letter has to be from his accountant. The same accountant that is on his tax returns etc.

      What about people that DIY tax returns? Can they get a family member that happens to be an accountant to write the letter?

  • pharkurnell on 01/12/2020 - 16:31

    Ask the company who he is going for the loan through who is asking for the letter.. might be a good start

    • swapup on 01/12/2020 - 17:01

      I see. Could you elaborate just a tad how know this would help, please? TIA

  • vinni9284 on 01/12/2020 - 16:32
    +1

    The Bank needs a formal letter to consider loaning money hence you would have to comply to their request to apply for a loan. Pay for an accountant.

  • loke on 01/12/2020 - 16:36

    ehh is said family member in public practice / a tax agent?

    I'd get a template ready and go the family route

    if not ask your usual tax agent/tax accountant to write one

    • swapup on 01/12/2020 - 17:03

      Neither in public practice or a tax agent, but she is chartered. Does that count?

  • holdenmg on 01/12/2020 - 16:43

    The accountant letter should be:

    On your accountant’s company letterhead, including contact numbers and the firm’s Australian Business Number (ABN).
    Contain details of any industry memberships / CPA qualifications.
    Dated.
    Signed.
    Contain the name of the person who signed the letter.
    Contain the name of the person who the letter is about, including their company (if applicable).
    Should confirm that the firm acts as the accountant for the person who the letter is about.
    Most accountants will require some kind of disclaimer to be in the letter to protect them from legal action.
    Read: https://www.homeloanexperts.com.au/home-loan-documents/accou…

    Will your Brother be running his Business from this Home or elsewhere?

  • Meho2026 on 01/12/2020 - 17:53
    +4

    If he has another source of income, it might be better just to go to another lender and keep his mouth shut about the business

    • miwahni on 01/12/2020 - 23:05

      …until the credit check shows he has a directorship…

  • [Deactivated] on 01/12/2020 - 19:02

    What an odd practice…

    Plenty of lenders dont want such paperwork

  • Typical16-bitEnjoyer on 01/12/2020 - 19:33

    Why even mention the business if it's a side gig?

    If it's his sole income, why even apply for a home loan when the business has just started up?

    • Htu08 on 01/12/2020 - 20:25
      +1

      directors search on ASIC

  • swapup on 01/12/2020 - 22:08

    Thanks for all the practical suggestion, folks. I called the bank and they said they'd be happy to run the numbers based on all other docs/info supplied. Fingers crossed the outcome is positive and that the letter won't be needed 🤞

    • miwahni on 01/12/2020 - 23:06
      +4

      Why did you call the bank instead of your brother? Oh… wait….

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