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> Trying to buy my first house as a freelancer

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lollipopkan
post Mar 19 2021, 10:34 AM

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QUOTE(trentssh123 @ Mar 19 2021, 09:02 AM)
Hi all, seeking some advices here. Tumpang TS Thread,

I am in similar situation, where I run my own business for the past one year.

I am going to try for a 1.09m loan for a landed property.

Basic of 5k with the rest under commission upwards to 18k.
Here comes the catch, where I declare only my basic as my income, and I didn't contribute to EPF, silly of me.

Can I attached a FD of 250k as a supporting document? Will my chances of acquiring the loan become higher?
*
Yes.
Windzneom
post Mar 19 2021, 12:03 PM

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QUOTE(trentssh123 @ Mar 19 2021, 08:02 AM)
Hi all, seeking some advices here. Tumpang TS Thread,

I am in similar situation, where I run my own business for the past one year.

I am going to try for a 1.09m loan for a landed property.

Basic of 5k with the rest under commission upwards to 18k.
Here comes the catch, where I declare only my basic as my income, and I didn't contribute to EPF, silly of me.

Can I attached a FD of 250k as a supporting document? Will my chances of acquiring the loan become higher?
*
It will helps but somehow most bank only approved if your business is already two years.
trentssh123
post Mar 19 2021, 12:18 PM

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QUOTE(Windzneom @ Mar 19 2021, 12:03 PM)
It will helps but somehow most bank only approved if your business is already two years.
*
Yes I am aware of that and I heard it's 3 years min, thus I am applying this as an Employee status by just using payslip and statements.
My individual doc are messy. bye.gif

This post has been edited by trentssh123: Mar 19 2021, 12:19 PM
lollipopkan
post Mar 19 2021, 12:52 PM

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QUOTE(trentssh123 @ Mar 19 2021, 01:18 PM)
Yes I am aware of that and I heard it's 3 years min, thus I am applying this as an Employee status by just using payslip and statements.
My individual doc are messy.  bye.gif
*
There is a possibility that if the company is sme, banker might check the owner of the company.

So if they see that you are or part of the owner of the company, they might check whats your percentage is the company, if exceeds certain threshold, they will take company profile as your profile to get housing loan, not your payslips.

Since you can put however high salary you want.
special
post Mar 19 2021, 02:54 PM

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if sdn bhd like my case, i run myself pay myself. is much more difficult to get a loan but i still got it at good rates also.
i went through workshops on bank documentation, talk to few bankers, try with the bankers, ask consultant here and there and learn a lot in the process.

FD show bank only helps them to feel ease, it does not really help in my opinion as not many banker interested with my FD. i just attach as supporting only.
they want to see your active income.
all bank will pull your CCRIS and CTOS.
when they pull your CTOS they can see you are company director. when they see that, they wont use your monthly income as income source.
so your monthly salary does not apply.
bank want to see:
1) your submitted PCB tax filed and paid to LHDN and they want the detailed document.
2) they want to see your Bank statement 6 months to see your incoming cash to the bank. (how much you pay out not so important)
they want to see a consistent stream of money inflow to your company account
if your revenue flow is strong, they can use it 10% of your revenue as DSR
if not strong then they use your PCB tax filling.
if you got 1 month say low incoming they already start questioning and the want your latest month not your best month when you receive the inflow.

assuming you PASS basic above
usually they will not reject you if your DSR can pass not much in debts.
they will just slash your margin of borrowing to 80% or 70% and come with higher interest rate as they deem you are higher risk customer.
but this only apply to local bank like Public bank, RHB, Ambank, CIMB

Bank that will reject you upfront as they prefer only salaried worker.
Maybank, UOB
maybank is the worse as i apply many things with them also reject upfront. my company bank account with them with all the statement they can get also they reject me.
and maybank has huge client database, thus they dont really pay much interest to sole prop or self employed. they will reject face up.

conclusion.
1) PCB
2) you bank cashflow consistent
3) if you bank in salary monthly make sure is consistent every month

if you got contribute EPF from company you can use CIMB Bank.
CIMB bank will pull your CTOS but if they know you are director, they may not submit your CTOS if they know your cashflow not strong.
they will submit your payslip and EPF as income document.

other bank i check already, all will pull your CTOS and use your CTOS to submit up to credit officer.




submergedx
post Mar 19 2021, 03:03 PM

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QUOTE(special @ Mar 19 2021, 02:54 PM)
if sdn bhd like my case, i run myself pay myself. is much more difficult to get a loan but i still got it at good rates also.
i went through workshops on bank documentation, talk to few bankers, try with the bankers, ask consultant here and there and learn a lot in the process.

FD show bank only helps them to feel ease, it does not really help in my opinion as not many banker interested with my FD. i just attach as supporting only.
they want to see your active income.
all bank will pull your CCRIS and CTOS.
when they pull your CTOS they can see you are company director. when they see that, they wont use your monthly income as income source.
so your monthly salary does not apply.
bank want to see:
1) your submitted PCB tax filed and paid to LHDN and they want the detailed document.
2) they want to see your Bank statement 6 months to see your incoming cash to the bank. (how much you pay out not so important)
    they want to see a consistent stream of money inflow to your company account
    if your revenue flow is strong, they can use it 10% of your revenue as DSR
    if not strong then they use your PCB tax filling.
    if you got 1 month say low incoming they already start questioning and the want your latest month not your best month when you receive the inflow.

assuming you PASS basic above
usually they will not reject you if your DSR can pass not much in debts.
they will just slash your margin of borrowing to 80% or 70% and come with higher interest rate as they deem you are higher risk customer.
but this only apply to local bank like Public bank, RHB, Ambank, CIMB

Bank that will reject you upfront as they prefer only salaried worker.
Maybank, UOB
maybank is the worse as i apply many things with them also reject upfront. my company bank account with them with all the statement they can get also they reject me.
and maybank has huge client database, thus they dont really pay much interest to sole prop or self employed. they will reject face up.

conclusion.
1) PCB
2) you bank cashflow consistent
3) if you bank in salary monthly make sure is consistent every month

if you got contribute EPF from company you can use CIMB Bank.
CIMB bank will pull your CTOS but if they know you are director, they may not submit your CTOS if they know your cashflow not strong.
they will submit your payslip and EPF as income document.

other bank i check already, all will pull your CTOS and use your CTOS to submit up to credit officer.
*
This is so much details
Thanks for sharing. Appreciated.

special
post Mar 19 2021, 03:09 PM

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QUOTE(TOHNO @ Mar 18 2021, 09:13 AM)
Hi all

A quick intro to myself.

I'm a freelance personal trainer. Means I run my PT by going to people's houses and charge based on an hourly basis .

And I've recently gotten my REN Tag , meaning I am too a property agent... a freshie if you will

With that said

My income for the years 2018 - 2019 is about RM6k -ish a month. I've started to file taxes in 2019 as I realize that I would want to buy a house one day and tax documents might come in handy. Also I took 3 Credit cards from Maybank , Shoppee , GRAB , Petronas cards. To help with my CCRIS. I've never incurred debt on these cards and also pay within 10 days.

2020 sadly was a rough year for me. My income was hit. Averaging 3-4k a month.

Anyways I'll file for 2 years

2019 , 2020 and also having a few CC

With that said I wanted to get a house in 1-2 years time. I decided to ask my team leader. He said my situation is going to be difficult as my job is considered unstable by the banks. Hence. He told me to use buy under someone else's name or register a Business Bank Account ( which I have ) and start placing money in and use it as a salary for yourself and show it to the bank as proof of income.

Anyways any sifus can teach me ?
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Easiest way and fastest way is find a job, work for 3 to 6 months.
apply quickly with those documents. get your desired house.
many people do that, rather than trying to improve your document which you got no control on how to bring in more income/revenue.
even with income/revenue you still have many things to prove to bank because bank dont believe you.

imagine i use 50k, i pump in to myself as Salary month say 10k.
after 3 months, i can recycle my 30k salary into the same account just to create a illusion of earning 10k per month.
that is why for sole prop is even more difficult to prove. for sdn bhd all accounts is audited by external auditors thus more reliable. (yet you need 2 years in operation)


bigman
post Mar 19 2021, 03:30 PM

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QUOTE(special @ Mar 19 2021, 03:09 PM)
Easiest way and fastest way is find a job, work for 3 to 6 months.
apply quickly with those documents. get your desired house.
many people do that, rather than trying to improve your document which you got no control on how to bring in more income/revenue.
even with income/revenue you still have many things to prove to bank because bank dont believe you.

imagine i use 50k, i pump in to myself as Salary month say 10k.
after 3 months, i can recycle my 30k salary into the same account just to create a illusion of earning 10k per month.
that is why for sole prop is even more difficult to prove. for sdn bhd all accounts is audited by external auditors thus more reliable. (yet you need 2 years in operation)
*
I did it last time when I still salary earner and same time start my own business... Can invest/ buy about 1.5 units per annum within 5 years... Last time... Easy to get loan and property price not as high as now with my double incomes...i not buying project that offer compression loan with inflated price...



This post has been edited by bigman: Mar 19 2021, 03:32 PM
special
post Mar 19 2021, 08:35 PM

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QUOTE(bigman @ Mar 19 2021, 03:30 PM)
I did it last time when I still salary earner and same time start my own business... Can  invest/ buy  about 1.5 units per annum within 5 years... Last time... Easy to get loan and property price not as high as now with my double incomes...i not buying project that offer compression loan with inflated price...
*
most important to the bank is your active income.
you supplementary income if it is TAx paid, is also recognized.
supplementary income source they will be vary whether is genuine or not, so they will check.

assume today you have 10 house all fully paid and collect rental income.
if you use rental income as source of income, bank also not recognize.
you use an active income + rental income, then they will recognize.
according to them, rental can one day become unrented. so is not active.

anyway, these are all the bank rules.
many people that know their rules will find way around it.

Redshelf411
post Apr 11 2021, 03:07 AM

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Question though now that we are on this thread... I'm currently working as a freelancer also. How do I "file income tax"? Because I understood that there is a form I have to fill in? How do you "justify" your income? Because my relative said if there is no contract/offer letter signed between me and the company I'm freelancing for, then whatever payment you get will be suspicious (read: money laundering). If the figure is really big, then BNM will start investigating me?
respectmypm
post Apr 11 2021, 02:05 PM

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This post has been edited by respectmypm: Apr 11 2021, 04:33 PM
Windzneom
post Apr 12 2021, 11:50 PM

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QUOTE(Redshelf411 @ Apr 11 2021, 03:07 AM)
Question though now that we are on this thread... I'm currently working as a freelancer also. How do I "file income tax"? Because I understood that there is a form I have to fill in? How do you "justify" your income? Because my relative said if there is no contract/offer letter signed between me and the company I'm freelancing for, then whatever payment you get will be suspicious (read: money laundering). If the figure is really big, then BNM will start investigating me?
*
Ok basically, if you haven't pay income tax before, go LHDN to get the PIN to do e-filling first.
Try to open an current acc with ssm, and bank in all your payment into it before you transfer to yourself as "salary"
issue statement for every payment you transfer to yourself. Keep it in case LHDN want to check you.
If the figure is big, and you don't have a source, ofcourse they will suspect you.
Or you go to LHDN, they will guide you also.
special
post Apr 13 2021, 02:53 AM

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QUOTE(Redshelf411 @ Apr 11 2021, 03:07 AM)
Question though now that we are on this thread... I'm currently working as a freelancer also. How do I "file income tax"? Because I understood that there is a form I have to fill in? How do you "justify" your income? Because my relative said if there is no contract/offer letter signed between me and the company I'm freelancing for, then whatever payment you get will be suspicious (read: money laundering). If the figure is really big, then BNM will start investigating me?
*
even if you are freelancer, if you freelancing for a company, the company pays you commission. that is tax deductible expenses for them. thus the company will sure declare this as expenses.
likely when you take your commission they ask you to sign on payment receive. but even if they never ask you to sign anything, as long as they issue it to your account with you IC and contact it can pass auditor already.

the payment commission to you is tax deductible, there is a form the company will fill to declare that as salary form/whatever under your name and IC.
this can be traced by LHDN.
this is because the company that declare this expenses needs to file and EA form for you.
if you do a lot of freelancing job for this company, they are require to produce and EA form for you and using this EA form you can declare your income to LHDN.
that is you fall into the category of taxable. income more than 36k per year.

using EA and your tax filling actually you can already use this document as your income commission to take a bank loan.
banker will advice you or you can always ask a banker if you want to take a loan, what are the process and documents that is needed for freelancer.
Redshelf411
post Apr 13 2021, 06:12 PM

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QUOTE(special @ Apr 13 2021, 02:53 AM)
even if you are freelancer, if you freelancing for a company, the company pays you commission. that is tax deductible expenses for them. thus the company will sure declare this as expenses.
likely when you take your commission they ask you to sign on payment receive. but even if they never ask you to sign anything, as long as they issue it to your account with you IC and contact it can pass auditor already.

the payment commission to you is tax deductible, there is a form the company will fill to declare that as salary form/whatever under your name and IC.
this can be traced by LHDN.
this is because the company that declare this expenses needs to file and EA form for you.
if you do a lot of freelancing job for this company, they are require to produce and EA form for you and using this EA form you can declare your income to LHDN.
that is you fall into the category of taxable. income more than 36k per year.

using EA and your tax filling actually you can already use this document as your income commission to take a bank loan.
banker will advice you or you can always ask a banker if you want to take a loan, what are the process and documents that is needed for freelancer.
*
Only one of my freelance clients pay via their company bank account... The others all paid via their own personal accounts... So, I'm not too sure of this entire thing tbh... They have never asked for my IC number although they do ask for phone number, since have to liaise work from WhatsApp. The last time I asked one of the freelance clients if there are any offer letter or agreement signed between us, he didn't answer. Kept quiet and all. Up til now whenever I asked, he never bothered answering.
special
post Apr 13 2021, 11:03 PM

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QUOTE(Redshelf411 @ Apr 13 2021, 06:12 PM)
Only one of my freelance clients pay via their company bank account... The others all paid via their own personal accounts... So, I'm not too sure of this entire thing tbh... They have never asked for my IC number although they do ask for phone number, since have to liaise work from WhatsApp. The last time I asked one of the freelance clients if there are any offer letter or agreement signed between us, he didn't answer. Kept quiet and all. Up til now whenever I asked, he never bothered answering.
*
bro, is very simple. from a company perspective, whatever they pay out they want to deduct it as expenses so they dont need to pay tax.
how they declare the expenses it depends on the company how they want to justify.
if they declare under commission payout, is easy to pass and auditor just need to verify this if they feel suspicious. they will call the commission earner to check.

if a company declare this expenses as marketing expenses, there is a limit to it and cannot claim 100% as expenses.
so a company will not claim all expenses as marketing, cause they can also create fake receipts, that is why there is always a cap on marketing expenses unless advertising like FB, google etc.

if a company declare payment to someone as expenses, usually LHDN will ask them to tie to that person. as a company they get tax deduction.
to individual, like me last time, if i under declare, LHDN still have a record of me in their system that the employer have submitted.
to catch me or not is a matter of time, if i under declare.

some company are too small. they pay you, probably they dont even keep proper record.
they dont declare their account so they dont even need to claim the payment to you as expenses.
if transaction goes through a company bank account, all have to be transparent for audit.

if a payment goes through individual account (personal) then, no . they wont submit your name to LHDN.
that is not consider as business.

if that is the case, then you have to do your own submission into your own company bank account or make your own record to declare that as your commission income.
you then need to pay tax for it and that is where you can proof to the bank that, you have those kind of income.
commission earner, banker wants to see consistency in your receive of the commission to back it as a source of income.
if you receive 1 lump sum commission say 150k in 1 year......then difficult to justify. unless every year also you receive 150k then can be recognize.
is all logic bro. how you think, bank will also think. you want cheat them, they also know how to screen you.
special
post Apr 13 2021, 11:12 PM

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QUOTE(Redshelf411 @ Apr 13 2021, 06:12 PM)
Only one of my freelance clients pay via their company bank account... The others all paid via their own personal accounts... So, I'm not too sure of this entire thing tbh... They have never asked for my IC number although they do ask for phone number, since have to liaise work from WhatsApp. The last time I asked one of the freelance clients if there are any offer letter or agreement signed between us, he didn't answer. Kept quiet and all. Up til now whenever I asked, he never bothered answering.
*
cannot give you offer letter. give you offer letter means hire you and need to pay EPF for you.
part timer also subject to EPF. if dont pay, you go report them to kWSP, they kena.
if i treat you as a supplier then you are just an expenses to me. i need your service.
if i offer you offer letter, that means you are my employee. different category already.
submergedx
post Apr 14 2021, 10:52 AM

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QUOTE(special @ Apr 13 2021, 11:12 PM)
cannot give you offer letter. give you offer letter means hire you and need to pay EPF for you.
part timer also subject to EPF. if dont pay, you go report them to kWSP, they kena.
if i treat you as a supplier then you are just an expenses to me. i need your service.
if i offer you offer letter, that means you are my employee. different category already.
*
yea, sneaky of them big corp playing this tax avoid stuff.

I was freelancing for a mnc design agency few years back then, they assigned me as a supplier, which they plan to pay me after 3 months.
So piss off when i recognized it. Straight reject the offer even though the director called me.

special
post Apr 14 2021, 11:05 AM

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QUOTE(submergedx @ Apr 14 2021, 10:52 AM)
yea, sneaky of them big corp playing this tax avoid stuff.

I was freelancing for a mnc design agency few years back then, they assigned me as a supplier, which they plan to pay me after 3 months.
So piss off when i recognized it. Straight reject the offer even though the director called me.
*
I see. this one a bit too much, want pay peanuts somor want retain 3 months.
but this is how company try to take advantage to save money.
but pay after 3 months for creative service is a bit too much.

for product and goods they like to do that because is a huge amount of cash that they can reuse in their business.
they can nego better terms from bulk, use the money to rent more spaces if warehouse, use to buy machinery etc.
and the thing is, they not necessarily pay on time after 3 months.
ssmart P
post Apr 14 2021, 12:29 PM

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If I were you, I will fully focus in building my own credit profile, do your best in property selling, for 2 years.

Then look for an experienced loan consultant within this 2 years, learn on how to select banks for housing loan according to your profile.
smartinvestor01
post Apr 15 2021, 06:48 PM

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Talking about this issue, freelancer, commission earners, and self employed (at the moment) are not really preferred parties by banks due to income stability.

However, banks would see consistent income by average of 6 months and there is some variance calculation involved.

This is also a reason why I also believe even for those with consistent income, banks are more likely to approve lower loan margin or higher interest due to some risk involved.

A little off the topic, I believe the gig economy would provide some strains in the optimistic property price in future as well unless we are talking about the properties at the lower price segment.

This post has been edited by smartinvestor01: Apr 15 2021, 06:49 PM

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