Finance with Income Protection

[WilliamB]

Hi all,

We are coming pretty close to our lending capacity but were recently comforted by the fact AMP was able to help us squeeze those final dollars out for a loan for a property we very much want.

Unfortunately because I am on income protection until May/June, my broker informed me AMP won't allow Income Protection to service a loan so we are a bit shot there. My broker is working away to find another bank, and suggested Bank of Adelaide, but I'm just wondering if any guru brokers here know of a lender or two with a similar servicing criteria as AMP, but that will accept income protection as income. LVR will be <80%

Thanks in advance,

 

[WilliamB]

I'd like to thank Rolf Latham for responding to me with a PM after making a few calls to get an answer for me.

I know you guys are busy and I appreciate the fact you wasted a bit of time on my query.

Thought it was worth a mention for anyone looking for a good broker.

Thanks mate,

 

[Brady]

I have had loans approved with CBA for both income protection and work cover.

 

[Aaron_C]

HSL too. Case by case thing though.

 

[Peter_Tersteeg]

It's not a scenario that comes up very often, but I've found that quite a few lenders are okay with income from an insurance policy as long as it can be demonstrated that it's got a reasonable lifetime.

Not all policies are created equal, but if you've had (and acted on) decent advice it's rarely a problem.

In this case the problem may be that the policy will cease in May/June. Lenders will want confirmation that you'll be in a position to return to work at that time (and that you'll have a job to go to).

 

[WilliamB]

Thanks guys, sorry PT_Bear the policy will last till I'm 65, but at this stage surgeon has estimated post easter return. I have a letter from him, and a letter from work stating I will return as a full time employee etc.

I guess the combination of stretching the limit of lending with less "conservative" lenders such as AMP and those that will accept income protection was/is the challenge.

We appear to have rested on Homeside as our target. I service with them, and I'm told they'll accept income protection, so here's hoping.

I have other loans with them too so that would be good. Already have 5 diff lenders, so going to another is less preferable, but of course happy to if I can wring the neck of those last dollars available

Thanks again all.

 

[Colin Rice]

We appear to have rested on Homeside as our target. I service with them, and I'm told they'll accept income protection, so here's hoping

Kudos to you for having the foresight to take out income protection insurance.

Highly recommended especially to those with no equity buffers in place as it could be the difference in the ship sinking and plain sailing.

 

[WilliamB]

Mate for us it was a no-brainer. The SMSF pays for it (even though I get no personal tax benefit).

I'm just annoyed I set it to 90 days rather than 30 before it kicked in.

I was really surprised when I spoke with a group of mates recently many with kids or at least a family home etc, and only one other mate had it.

I think its a must for everyone. We had some savings, but it would have killed them in the 6 months I've been off. We'd literally have had to put life on hold.

Instead during that time we have acquired 3 properties and built 2 more

 

[Colin Rice]

As a duty of care I offer the opportunity to all my clients but only the minority take up the offer.

I don't provide the advice or service myself (that may change in the future) but many say I already have it via my employer, which is better than nothing, but most are inadequate and will have an extended wait times so still worth getting it reviewed regardless.

If you can survive the wait all good and well but many are riding on the edge and a 90 day wait would cause unnecessary anxiety and financial hardship.

 

[WilliamB]

I agree, I had about 85 days of SL, AL and LSL that I used up waiting, all for an extra 20 bucks a month or something. Dumb.

 

[DaveM]

I have the full gamut of cover, ip, tpd, trauma and life. Paid through mix of smsf and personal contribution

I am classed as self employed (company director) so for sanf its well worth it

 

[Rolf Latham]

I agree, I had about 85 days of SL, AL and LSL that I used up waiting, all for an extra 20 bucks a month or something. Dumb.

can I use that quote for our financial planner

ta
rolf

 

[WilliamB]

Go crazy mate, if it means it helps people think about making sure they are covered properly...go for it!

 

[Sean M]

Hi William

I hope you get the loan via the income protection. I am glad to hear that you are have that cover so you can focus on other things.

I hope this reminds those who come to financial planners like myself and ask me why do I need income protection. Your income is one of the biggest assets you will ever have and it is important to protect it.

Cheers

Sean