borrowing capacity

[grantwhit]

how does having your net assets spread across different classes impact your borrowing capacity? what class would be the most ideal ?
eg 50k cash 50k shares v 100k shares v 100k property etc

 

[Peter_Tersteeg]

Asset classes make little difference to borrowing capacity. You essentially need 2 things:

1. A deposit. Could be cash or equity in another investment. Shares can be used but are not ideal.
2. Income to make payments. Chances are your net assets won't make much difference here.

Other assets can help improve your risk rating which can help, but these are the two things you have to work with first.

 

[Shahin_Afarin]

Yes. You can use the rental income (even if its proposed rather than current) whereas not all lenders will accept shares income.

Regards

Shahin

 

[Aaron_C]

Most important thing is DSR (Debt Servicing Ratio) aka income and the security. Nothing else really matters except for credit scoring.

 

[Anthonyj]

Most important thing is DSR (Debt Servicing Ratio) aka income and the security. Nothing else really matters except for credit scoring.

How does it play out if you are using a 20% deposit and rental income services the loan (IO).
Do you still need to provide details of personal income? I may be changing jobs soon and don't want to go through the new job waiting period.

 

[Shahin_Afarin]

Some banks yes and some banks no. Some don't have a waiting period and will accept even if you have been in the job for one day. Are you sure you can service the loan using just the rental income?

Regards

Shahin

 

[Aaron_C]

How does it play out if you are using a 20% deposit and rental income services the loan (IO).

Well obviously that depends on the numbers. If you can service without any personal income then you can tell them you are unemployed and it won't matter.

 

[Anthonyj]

Thanks. Good to know there are options.