How much can I borrow

[esdarch]

Hi all,

My broker cannot answer the question so hope anyone shed me a light.

My overseas relative won lotto and send 500k cash to Melb in order to buy a property in joint venture with me. The issue is I already bought the third IP 2 months ago and seems reaching the borrowing limit for around 8 months to have the income recovered.

With half a mill cash, will any bank be happy to lend me some? I not expect 80% leverage but even 50% is good enough.

Cheers.

 

[D.T.]

If your broker can't answer simple questions like 'how much can i borrow?' I suggest you might need to find a more competent one.

80% should be easy.

 

[peter fraser]

Hi all,

My broker cannot answer the question so hope anyone shed me a light.

My overseas relative won lotto and send 500k cash to Melb in order to buy a property in joint venture with me. The issue is I already bought the third IP 2 months ago and seems reaching the borrowing limit for around 8 months to have the income recovered.

With half a mill cash, will any bank be happy to lend me some? I not expect 80% leverage but even 50% is good enough.

Cheers.

There is no borrowing limit although there is an exposure limit for mortgage insurers of about $2.5M each. As long as you stay under 80% LVR you will only be restricted to your capacity to repay. If the property (or properties) that you are buying have a rental income then your borrowing capacity should be enhanced by that income.

If your broker has recently lodged an application then his data should be up to date and he should be able to make an educated guess on how much you can borrow as long as you can estimate the rental income with some accuracy.

 

[Mick C]

Income?
rent?
Liabilities?
Dependents?


A bit hard to answer such a board question without the basic income/liabilities.

 

[Terry_w]

The issue is I already bought the third IP 2 months ago and seems reaching the borrowing limit for around 8 months to have the income recovered.

If you have reached borrowing capacity then having a larger deposit generally will not help - especially if the deposit is a private loan from a relative. This is because of the responsible lending laws under the NCCP.

However, there are multiple lenders out there with different criteria so you may qualify with a different lender.

Think you need a new broker!

 

[Peter_Tersteeg]

With half a mill cash, will any bank be happy to lend me some? I not expect 80% leverage but even 50% is good enough.

This means you've got a great deposit and the risk is low. It'd doesn't demonstrate your ability repay the loan though.

To determine your ability to repay a loan, your liabilities, number of children, personal income and PAYG income need to be considered.

The law requires financiers to verify that you can afford the loan repayments which is all about money coming in vs money going out on a regular basis. A big amount of cash is good, but not the same thing.

If your broker can't explain this to you, you need to talk to someone else.

 

[esdarch]

More information.

Income? 130k
rent? 23k/a for IP1, IP2 will settle next month rent approx. 18k/a
Liabilities? owning 1.4mil for PPOR & 2 IPs, total value 1.9mil
Dependents? 2 kids

I was noticed about repayment restriction, but hope there is any lender have lower requirement.

 

[Peter_Tersteeg]

More information.



I was noticed about repayment restriction, but hope there is any lender have lower requirement.

Different lenders have different requirements in how they assess income. This can mean for some people different lenders will lend more or less given their circumstances. It's not possible to determine which lenders might be suited to your needs based on a few number, a proper analysis needs to be done.