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From: Mike .
Servicability Questions
From: Ethann
Date: 8/22/00
Time: 2:08:21 PM
Hi,
I'm about to get started in this game and I figure that servicability is a road block I will come up against sooner or later.
Can someone please explain how lenders determine whether or not you are able to service a loan repayment ?
I assume they look at your overall position i.e. total mortgage payments for home plus IP's and then compare this to a percentage of your income. Can someone tell me what the percentage is ? I've heard figures ranging from 25 - 40%.
What else do they take into account ? If you are on an interest only loan do they calculate on this basis or do they calculate on a P&I basis on the assumption that eventually you will be paying P&I ?
How do they factor the rent from an IP ? Do they have a standard formula e.g. assume 40 weeks rent from the IP a year ?
I'd also be interested to hear about others experience with servicability limits.
Thank you.
Servicability Questions
From: Ethann
Date: 8/22/00
Time: 2:08:21 PM
Hi,
I'm about to get started in this game and I figure that servicability is a road block I will come up against sooner or later.
Can someone please explain how lenders determine whether or not you are able to service a loan repayment ?
I assume they look at your overall position i.e. total mortgage payments for home plus IP's and then compare this to a percentage of your income. Can someone tell me what the percentage is ? I've heard figures ranging from 25 - 40%.
What else do they take into account ? If you are on an interest only loan do they calculate on this basis or do they calculate on a P&I basis on the assumption that eventually you will be paying P&I ?
How do they factor the rent from an IP ? Do they have a standard formula e.g. assume 40 weeks rent from the IP a year ?
I'd also be interested to hear about others experience with servicability limits.
Thank you.
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