Hi Property Investors.
I recently tried to refinance a loan to complete some renovations and was knocked back as my ratio of rental income exceeds my salary. We are currently getting approx 120K in rental income, portfolio is roughly $2.5 with approx 350k in loans. I would love to start looking at another property using the equity we have but don’t want to waste time applying for finance if it will get declined based on serviceability.
NB: Loans are in personal names
Does anyone know of a solution around this?
Cheers Brett
You need to seek credit advice from a broker. Was the reason that you failed serviceability or that you were too rent reliant?
As a guide you could generally borrow 7x your annual pretax income – very rough.
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
Hi Terry,
sorry for the delay in responding. We were told it was too rent reliant. How does one get around this?
I’d love to leave my job and become a full time property investor. But just don’t know how to proceed.
brett
The first thing to do would be to try a different lender.
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
I heard some folks dealing with similar issues and finding creative solutions. One thing that popped up was exploring lenders who consider rental income more favorably. It might be worth having a chat with a mortgage broker who specializes in property investment—they can be wizards at finding tailored solutions.
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