In conversation with Lawyers Weekly, Legal Home Loans director of sales Cullen Haynes said that those who are looking to purchase may benefit from competitive pricing on property purchases, limited competition (there may not be as many buyers in market approved for finance), and historically low rates.

As such, Mr Haynes said, it is important that lawyers take this time, with the end of the financial year approaching, to review their finances.

“Firstly, if you are a barrister, firm owner, or sole trader, your most recent tax return is the most important piece of supporting evidence when borrowing money. Banks and lenders want to see your most recent, finalised lodged tax return. Particularly in the current climate, your latest information is key to prove your income is unaffected by COVID-19, even more so if you’ve had an increase in income since 2019,” he outlined.

“Secondly, self-employed practitioners should note the instant asset write-off threshold has been temporarily increased to $150,000 to provide relief during this period. Self-employed lawyers must take advantage of this before the end of June.

“Lastly, all legal professionals should take the time to look at restructuring their debts. Investment loans should be reduced to interest-only repayments, as they are tax-deductible. This will allow borrowers to prioritise paying down their non-deductible debt – their primary residence mortgage – as much as possible.”

There are three main points that lawyers across the board should keep in mind at this juncture, Mr Haynes posited: First, if one’s income has increased, getting tax returns done validates this and enables higher borrowing amounts, second, rates “have never been cheaper”, and third, house prices may fall, “so refinancing now while valuations are holding up is a prudent move”.

For those who are seeking financing, Mr Haynes also noted there may be some danger in not taking active steps right now to shore up one’s finances.

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“For new businesses or those who’ve had an increase in income within the past 12 months, you will be unable to access competitive finance without proof of income; major lenders require finalised tax returns, so BAS statements and bank statements will not hold any weight. There are low-doc lenders available that rest on limited information, these options however can be costly,” he said.

He further pointed to changes in credit policies: “Banks are tightening their lending appetite so delaying may mean you miss out on a competitive advantage such as 90 per cent NIL LMI or limits to your borrowing power.”

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