Last week I was told by a bank employee that they won’t accept investment property rental income when determining my ability to service a loan. At the time I took this to mean not ever in any case, but really is it just the first properties that you invest in, still requiring your own ‘job’ income to service the loans?
I will ask them to clarify this for me, but in the meantime, can anyone tell me if the banks advice to me was only about the initial (hopefully shortlived) situation, that as soon as I can show levels of income derived from property rentals, eg. at the end of the financial year, then this qualifies as assessable in determining ability to service future loans.
Otherwise how does anyone achieve the goal of ‘job’ independence?
Next stop is my accountant, but I am also keen to find things out from you folks in this great forum.
Also, does anyone know of an Australian book or website detailing financial details/how-to’s such as this. Perhaps Jan Somers? who seems to offer well explained easy-to-follow information.
abundance
all my income is considered. after all mr ATO does.
My bank manager certainly includes this
elves
Rental income is included at 75% or 80% depending on the lender.
You need to speak to someone who knows what they are talking about.
Cheers,
Simon Macks
Mortgage Broker
[email protected]
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.
Abundance,
If the property you intend to purchase is tenanted, the lending institution may include 60% to 80% (in some cases depending on the post code) of rental income towards your borrowing capacity to calculate your ability to service the loan,
If the proposed property is vacant, the lender may require a rental valuation.
Regards
Steven
Mortgage Broker.[email protected]
http://www.mobilemortgagemarket.com.au
Ph:0402483216
VictoriaPLEASE note comments made should NOT be taken as specific taxation, financial, legal or investment advice. Please seek professional, specific advice.
Originally posted by mobilemortgage:Abundance,
If the property you intend to purchase is tenanted, the lending institution may include 60% to 80% (in some cases depending on the post code) of rental income towards your borrowing capacity to calculate your ability to service the loan,
If the proposed property is vacant, the lender may require a rental valuation.
Regards
Steven
Mortgage Broker.[email protected]
http://www.mobilemortgagemarket.com.au
Ph:0402483216
VictoriaLike Steve Said a Rental Appraisal is need if property is vacant at the time of purchase. All you have to do is contact any agents in the area and ask for the rental appraisal or go direct to the real estate agent that you buying from and get one.
In NSW, the bank normally ask for first page of contract and rental appraisal. 70% to 80% of rent will be consider as part of the income and again it’s depend on which lender you are using.
Good luck with your investing journey…
Warm Regards
ChanDollars
[Keep going, you’re on your way to financial freedom]Awesome, I’m so impressed getting your feedback, I’ll be getting a rental valuation now
thanks for helping me out.abundance
It is a pitty bank staff are so poorly trained and don’t (often) know there own policies. Most people would probably take ‘the banks’ word for it if they were told something like this.
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
Just to give you guys a bit of a pat on the back – I always use a mortgage broker.
A good mortgage broker is worth their weight in gold!
[^][^][^]Shushar
“All our dreams can come true, if we have the courage to pursue them.” – Walt Disney
Steve and Terry,
How many people do you meet that tell you they cannot get a loan because their bank told them? The bank say save a bit more and come back, and meanwhile house prices rise.
They think all banks are the same so they give up.
Nine times out of ten we place them in a better deal immediately because the banks serviceability rules are all so very different.
Cheers mate,
Simon Macks
Mortgage Broker
[email protected]
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.
Shushar,
Thank you for your kind words,Simon & Terry, I agree with your sentiments 100%,
Some other issues that make my blood boil,,,,or, more reasons to use a good mortgage broker,,,,The amount of clients lumbered with the wrong loan product from some banks, failure to inform a customer of available discounts, excessive security grabbing, lack of knowledge regarding there own product details, I could go on but I better stop there,,,
Regards
Steven
Mortgage Broker[email protected]
http://www.mobilemortgagemarket.com.au
Ph:0402483216
VictoriaPLEASE note comments made should NOT be taken as specific taxation, financial, legal or investment advice. Please seek professional, specific advice.
Hi I have learned through my experience’s that if you don’t succeed with the banks or with a broker move on and try the next one till you are happy. I have found a really good one and he is helping me heaps
Good luck with itCornel
thanks for helping me out.
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