When a bank asks for your net salary amount can you take in to account the reduced tax you would be paying on a negatively geared investment property (including a proposed property purchase). If this is the case it would increase the net salary and therefore loan serviceability……..or am I missing something!!!.
ned kelly
Ned
Usually when you calculate serviceability it is easier to work from Gross monthly income and then calculate the actual tax payable.
This avoids any distortion when it comes to items such as salary sacrificing, spouse super contributions etc etc.
Rent is then applied depending on the percentage the lender allows (rule of thumb is 70-80%) and an adjustment for the negative gearing element. This can be calculated using a negative gearing calculator although it is not rocket science.
Richard Taylor
Residential & Commercial Finance Broker
Licensed Financial Planner
Ph: 07 3720 1888
[email protected]Richard Taylor | Australia's leading private lender
Ned,
Keep in mind servicing parameters will vary from One lender to another, e.g., some lenders account for 70% of gross rental return and other lenders 80-100%, the same with neg. gearing benefits and so on, some lenders will not take into account interest on IP’s from external lending institutions.If your getting grief from a lender regarding serviceability then simply approach another, or talk to your Mortgage Broker, Cheers.
Regards
Steven
Mortgage BrokerMobile Mortgage Market
Ph: 0402 483 216
[email protected]
http://www.mobilemortgagemarket.com.auPLEASE note comments made should not be taken as specific taxation, financial, legal or investment advice.
There are quite a few lenders who will now allow negative gearing amounts to be added back into gross income. This is becoming more and more common. I woud recommend speaking to a mortgage broker who will look at your individual circumstances and advise you which lender is best for your scenario.
Anita Marshall
Advanced Finance Solutions
http://www.advancedfinance.com.au
[email protected][fez]
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