Your income not considered by your lender?
Loans allowing commission income
The variable nature of commission income can scare some lenders. However, as long as you can show that it is consistent, we should be able to use your commission income to help you secure the loan you want.
How your commissions are paid will have an impact on how much of that income we can use. If you are paid commission monthly it is pretty straightforward, and lenders will be comfortable to take most of your income into account. If you are paid half yearly or annual commissions it can be a bit trickier, and we may need to restrict the commission part of your income to 50% and show a few years worth of group certificates or tax returns.
Loans allowing 100% of overtime
There has been a recent change to the two major mortgage insurers’ policy, and it is now within policy for them to accept 100% of overtime (provided it is consistent and easily verified). This may not always be your lenders’ policy however, and they may only accept say 50% of overtime income. Considering some employees (such as nurses and police officers) can receive up to half their pay from overtime and shift allowances, it pays to know which lenders are willing to do what. Contact us first to avoid disappointment.
Loans allowing bonus income
Many lenders flat out will not accept bonus income. For persons employed in the banking sector where bonuses are often more than base salaries, this can be a problem. At Mortgage Experts we can find lenders that will either take 50% of bonus income into consideration – or even 100% in some cases. Contact us to discuss.
Loans allowing all of your rental income
Most lenders will take only a percentage of existing and future rental income into account when assessing how much to lend you. Often the amount is around 70% - 80% of the rent received or to be received. We have a one lender who will allow 100% of rental income to be used with some conditions – mainly that the loan LVR is less than 80%, and that your total loans with that lender are less than $1,250,000. This same lender will assess other banks/lenders loans at their actual repayment, rather than with an interest rate buffer. So this lender may suit investors who cannot borrow any more with their current lender, but who feel they are easily capable of meeting their current and future loan commitments.
Loans allowing just 1 year’s tax figures for the self employed
Lenders view and treat income for self employed applicants very differently. Most lenders want 2 years of tax returns for self employed borrowers, and will take an average of the last 2 years income figures when working out how much to lend you. Some will also restrict the last year’s income to no more than 120% of the first year’s income, or even take the lower figure if the variance between years is more than 20%. Talk about penalising achievement!
If you need the extra income from your last year’s trading figures to get your loan over the line, we have two lenders who will work on your last year’s tax return (although one will want to see your last 2 years’ worth).
We also have in the past had loans approved for clients who have been self employed for less than 1 year. If your income is strong but you have only been trading a little while you may be surprised what we can talk a lender into doing. Why not contact us to discuss your unique situation.