Will the banks count potential income?

[Pablo]

Hi,

I may soon be applying for finance on a potential IP purchase, my wife does not have any income but she has agreed to go back to work so that we meet the banks DSR. My problem is that she will not have any income when we apply for the finance, will the banks take our word for it that she will be going back out to work and count her potential income? I doubt that she will have problems finding a job but unfortunately it won't be a high paying one.

Thanks
Pablo.

 

[Rolf Latham]

Hiya Pablo

Case by case, and depends on why shes off work now, going back to previous employer, Loan to value ratio etc

Best to broach that subject in detail with your lender and/or broker BEFORE making a formal application.

ta
rolf

 

[Pablo]

Thanks Rolf,

She stopped work when we had children but since they are now at school she is able to go back now.

Our LVR is ok but just need an extra $200 to get the DSR.

Pablo.

 

[Rolf Latham]

Hiya Pablo

Worth looking at then.

You could look at using another lender, whose servicing model is a little more generous, thus there would be no reliance on the spouse's income

ta
rolf

 

[Qlds007]

I think depending on the LVR as Rolf has mentioned anything is possible but if you are only $200 away better of looking at someone with a more generous serviceability formula.

 

[Bradsdad]

Thanks Rolf,

She stopped work when we had children but since they are now at school she is able to go back now.

Our LVR is ok but just need an extra $200 to get the DSR.

Pablo.

What is "OK" for you maybe different from what's "OK" for a lender. I personally feel that you would struggle to have a lender look at "potential" income under the circumstances you have mentioned.
Also remember that even if she does start a new job, she may well have a 3 month probabtionary period. If hse could have this waived it would assist greatly in speeding your quest up.



Regards
Steve

 

[Pushka]

Well, in my application they included potential rent, so there is some hope!

 

[Peter_Tersteeg]

Potential rent is fairly obvious, potentially going back to a job is not quite the same thing. I wish it were different, but the argument is a little flimsy.

I guess it's worth a shot, but ideally it would be best if your wife went back to work, preferably with her previous employer. A payslip or two and a letter describing the dates of her employment and maternity leave certainly makes a finance application a lot stronger.

 

[Pablo]

Well I missed out on the ip I was hopping to purchase but went into Westpac last week anyway to organise my loans for my next purchase. When I was in there I asked how they view potential income and they neither said yes or no. She gave me the view that they would count it if there wasn't much in it, say $100/week shortfall.


But an interesting matter did come up, she said that they couldn't count my 2 rental payments as they are periodic leases . When I discussed the issue she said that I would probably have to get a property manager to give an estimate on what the property would rent for. I had to laugh at this since both leases have only gone periodic in the last 3 months and the payments are paid into a separate Westpac account where they can clearly see them.

Anyone else encountered this problem?

 

[Rolf Latham]

Periodics with most lenders are ok...................I assume you self manage ?

ta
rolf

 

[willfong]

Has anyone actually had experience in getting spouse's income taken into consideration during maternity leave?

 

[Rolf Latham]

Hiya Will

If its fully paid leave, and there is a job to come back to the lenders would be on dicey ground refusing such an application on the basis of stability of income

ta
rolf

 

[tobe]

I have only gotten a conditional approval subject to the first payslip when she comes back. letters saying she will come back, from her and the employer dont count, just the first payslip........ It may diferent under 80% lvr, I dont do too many of those.