If one had 8IP’s generating 80K pa and working a job paying 70K pa. Is there a scenario where banks may say no to lending you more. ( say because of combined income not enough… ie income tested? ) even though the net assets are well under 80% of borrowings.
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Hi Michael1,
it really depends on the individual and each properties rental, as you acquire more loans and more properties, depending on what the amount borrowed and the rental percentage ratio is, you may find that, either you can still or cant service the loans further more, but it really depends again with the individual, on the amount of rental coming, + job income vs, banks ideal or loan repayments. there are other little areas that do get included, but this is the main important issue.
Cheers,
sisI am told that all banks have their own means of measuring your servicability, however a typical DSR calculation that I use to try to keep track against is to add up all your loan commitments (including car leases before tax benefits) plus 5% of any undrawn credit amounts and divide it by the total of 30% of your wages and 80% of your rent. I think the resulting number should not exceed 100%?? sorry but I haven’t looked at it for a while.
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Michael1,
There are also loc doc lenders who might be approporiate in the broad circumstance you mentioned. (If your LVR is ‘well under 80%’)James
That specif scenario doesn’t have enough detail for an answer. $150K income and a LVR under 80% sounds like it should be possible – depending on how much you wish to borrow.
Cheers,
Simon Macks
Mortgage Broker
http://www.mortgagehunter.com.au
0425 228 985Comments may not be relevant to individual circumstances. If you intend making any investment, financial or taxation decision you should consult a professional adviser.
You may, also have a ‘lot’ of equity within those 8 IP’s..??
rents increase over time, loan decreases over time, tax and depreciation benefits utilised to draw down your loans at end of Financial year..maybe in a short period your loan servicibilty will look better.. that’s where mortgage brokers come in handy also..they’re happy to chase the best deal for you.. win-win situation
REDWINGmy 2c.. for what it’s worth
“Money is a currency, like electricity and it requires momentum to make it Effective”
There will be a time when banks will say no more, but shopping around should let you keep going. some banks get worried when you are too rent reliant. I once asked a lender to define rent reliant, and was told if the client needed the rent to service the loan, then they are rent reliant!!!
Terryw
Discover Home Loans
North Sydney
[email protected]Terryw | Structuring Lawyers Pty Ltd / Loan Structuring Pty Ltd
http://www.Structuring.com.au
Email MeLawyer, Mortgage Broker and Tax Advisor (Sydney based but advising Aust wide) http://www.Structuring.com.au
Thankyou for your input learned friends. Assets mentioned total 1.8 mil with 150k income. What would be the banks answer if wanted to borrow a total of 1.45 mil ?
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They would say exactly the same as me.
Please sit down and tell me more details so we can examine the options here.
Cheers,
Simon Macks
Mortgage Broker
http://www.mortgagehunter.com.au
0425 228 985Comments may not be relevant to individual circumstances. If you intend making any investment, financial or taxation decision you should consult a professional adviser.
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