will they lend

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Phil_2
Member
@phil_2
Join Date: 2004
Post Count: 45
January 18, 2004 - 8:12 am
will banks keep lending you money even if you can’t make the repayments on paper? Or how do they calculate whether you can make the repayments?
ie we are soon to have 2 -ve geared IPs + our PPOR = large debt. this we can manage ok but I now want to buy a +ve geared IP, we will have 150k equity (easy). Will we get more finance for a +ve IP?
Mobile Mortgage
Member
@mobile-mortgage
Join Date: 2003
Post Count: 913
January 18, 2004 - 1:37 pm
Hi Phil,
The answer to your question will depend on a number of factors,
A lender will determine your borrowing capacity based on some of the following,
LVR of the loan,
Is Mortgage Insurance required,
Annual repayments on loan,
Primary purpose,
Credit history,
Savings,
Benchmark rate and debt service ratio
Rental income, some lenders will allow 80% and other lenders will only allow 60% of gross rental towards income,
Credit cards, 2% or 3% of the maximum limit, e.g.: $10.000 limit on credit card @ 3% = $300 per month, regardless if you have a balance of $1 or $10.000
Number of Dependents,
Living Expenses,
The size and amount of cars owned,
Other loan commitments,
Rates and Insurance,
Locality of property,
Type of property,
Valuation of property,
Acceptable Income: this will vary between lenders, Full-time, Part time, (Casual 25% to 100%) overtime, interest, Maintenance, family payment, commission, Self employed addbacks, Superannuation,
These are just a few points a lender or Mortgage Broker will look at when calculating serviceability for a loan application, Hope this helps.
Regards
Steven
Mortgage Broker
[email protected]
http://www.mobilemortgagemarket.com.au
Ph:0402483216
Victoria
PLEASE note comments made should NOT be taken as specific taxation, financial, legal or investment advice. Please seek professional, specific advice.
Terryw
Participant
@terryw
Join Date: 2001
Post Count: 16,213
January 19, 2004 - 1:54 am
Lenders are usually conservative. So if you can’t afford it on paper, you are unlikely to get a conventional loan. However there are loans out there, such as private lenders, who lend based soley on the value of the property, not taking into account your income. So if you can still come up with deposits, you can keep borrowing.
Terryw
Discover Home Loans
North Sydney
[email protected]
Terryw | Structuring Lawyers Pty Ltd / Loan Structuring Pty Ltd
http://www.Structuring.com.au
Email Me
Lawyer, Mortgage Broker and Tax Advisor (Sydney based but advising Aust wide) http://www.Structuring.com.au