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Settled Scenarios
Australian Taxation Office declaration documents alongside Australian currency and a calculator, representing the assessment of small business tax liabilities and alternative lending solutions.
ATO DEBT

Refinance and ATO debt clearance on alt doc income

A couple refinancing an owner occupied property and clearing a growing ATO debt, with the self-employed applicant’s financials two years behind after illness.

$750K

LOAN AMOUNT

Owner Occ

SECURITY

2 BAS

INCOME EVIDENCE

THE STORY

The file, in three parts

What the broker brought, how the credit analyst read it, and what settled

01 · The challenge

A PAYG employed applicant of 61 and his wife of 55 sought to refinance their owner occupied property and clear a significant ATO debt at the same time. The wife was self-employed and a cancer survivor, and the time she had needed to recover meant her financials for the past two years had not been completed. Without those statements her income could not be verified in the usual way, and the ATO debt was continuing to grow while the position remained unresolved.

02 · How VMG assessed it

Human underwriting used an alt doc product, which meant the assessment could proceed without full financial statements. A customer declaration was obtained from the wife setting out her income, supported by two Business Activity Statements, which were annualised to produce a working income figure. Expenses were applied on a fair and reasonable basis, arriving at a figure that was realistic for the household rather than notional. The ATO debt was treated as a liability to be cleared through the refinance rather than as a disqualifying mark on the file, since consolidating it into the loan resolved the pressure driving it upward.

03 · The outcome

VMG settled a $750,000 refinance that repaid the ATO debt and consolidated the existing mortgage into a single facility. The couple came out with one repayment and no outstanding tax liability accruing behind them.

THE TURNAROUND

Before and after

The same file, before the refinance and at settlement.

BEFORE VMG

Two years of outstanding financials following the wife’s illness.
Self-employed income unable to be verified by standard documents.
ATO debt growing while the position remained unresolved.
Existing mortgage and tax liability running as separate pressures.

AFTER SETTLEMENT

Alt doc assessment on a customer declaration supported by two BAS statements.
BAS figures annualised to establish income.
Fair and reasonable expenses applied to reach a sustainable servicing figure.
ATO debt cleared and the mortgage consolidated into one loan.

💡THE VMG COMMON-SENSE ADVANTAGE

Outstanding financials are a documentation gap, not a verdict on the business. Alt doc exists for exactly the years that got away from someone.

HOW IT WAS ASSESSED

Human underwriting

Every file is read by a credit analyst, not scored by a system. There is no credit scoring, and no DTI or DSR ratio applied. The product and the terms depend on the individual file, so talk to your BDM about where a similar scenario fits.

Have a similar file?

Test the scenario with VMG credit before you lodge. VMG lends only through accredited mortgage brokers.

Test a scenario

Related

More settled scenarios

FUTURE INCOME STREAM

Using Future Business Sale Proceeds to Secure Property Purchase

Owner occupied purchase supported by PAYG salary and the remaining tranches of a business sale being paid out over five years.

$1.8m

LOAN AMOUNT

Owner Occ

SECURITY

5 years

SALE TRANCHES
Read the case study
LOW CREDIT SCORE

Consolidating seven loans on a low credit score

Seven loans consolidated for a borrower with a low credit score, all repayments current, after the file had been declined elsewhere.

$508k

LOAN AMOUNT

7 Loans

CONSOLIDATED

$525

MONTHLY REDUCTION
Read the case study
DEBT CONSOLIDATION

Consolidating eight loans after a separation

A tradesperson left solely responsible for eight loans after a separation, with repayments slipping as rates rose.

$552k

LOAN AMOUNT

8 loans

CONSOLIDATED

$1,290

MONTHLY REDUCTION
Read the case study

QUESTIONS

Frequently asked questions

ATO debt can be considered as part of a refinance or consolidation, assessed case by case. Credit will want to understand how the debt arose, whether it is still growing, and whether the applicant's position after settlement is genuinely improved. A payout figure from the ATO and an explanation of the circumstances should go in with the file.
Alt doc assessment allows income to be established without full financial statements, typically through a customer declaration supported by other evidence such as BAS or business bank statements. The supporting documents need to corroborate the declared figure rather than simply accompany it. Your BDM can confirm what combination suits a particular file.
It provides context, and context is what human underwriting works from. A gap in financials with a clear explanation and evidence that the business continued to trade reads very differently to a gap with no explanation. Include the circumstances in the file notes rather than leaving credit to infer them.

All applications are subject to Victorian Mortgage Group’s standard credit assessment and lending criteria. Terms, conditions, costs and charges apply. This article is general information only and does not take into account your objectives, financial situation or needs.

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