38k income per year, almost zero expenses, borrowing power?

Discussion in 'Loans & Mortgage Brokers' started by jaybean, 1st Apr, 2017.

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  1. jaybean

    jaybean Well-Known Member

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    A friend of mine has 70-80k for a deposit, a relatively low salary (still on 3 months probation, she knows she needs to wait another 3 months before the major banks will accept her), lives at home (so almost no expenses), no other assets, and would like to figure out how much she can borrow. The calculators I've used seem to vary quite a bit. Do you think it's reasonable to expect the banks to lend around 250k? I would think any more would be too risky for her salary level anyway.
     
    hammer likes this.
  2. Property101

    Property101 Well-Known Member

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    I would say more near 200k...unless its an investment property.
     
  3. jaybean

    jaybean Well-Known Member

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    Yeah it's an IP.
     
  4. Jamie Moore

    Jamie Moore MORTGAGE BROKER - AUSTRALIA WIDE Business Member

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    Best to approach a broker to get a reasonably accurate answer. Their living expenses and expected rental will come into play too.

    Cheers

    Jamie
     
  5. The Y-man

    The Y-man Moderator Staff Member

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  6. Simon Moore

    Simon Moore Residential & Commercial Mortgage Broker Business Member

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    I have run some very rough numbers, if she is living rent free and received $350 p/w rental from the investment she could potentially borrow $400,000.

    Obviously I would need to understand more about her situation to give an accurate figure.
     
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  7. Indifference

    Indifference Well-Known Member

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    You must have assumed 38k net to get 400k surely.... If it is 38k "salary" as a gross figure, how much different do the numbers run?
     
    Sonamic likes this.
  8. Simon Moore

    Simon Moore Residential & Commercial Mortgage Broker Business Member

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    No. I have been doing this for a while ;)

    Gross income PAYG = $3166p/m
    Rent $350p/w @80% = 1213p/m
    Total gross income = $4380p/m
    Gearing deduction $400,000 x 7.25% = $2416p/m
    Taxable income = $1963p/m
    Tax = $100 p/m
    Net income = $4280p/m

    Loan assessed $400,000 @7.25% over 30 years = $2728p/m
    Allowance for living expenses (assuming single and living rent free) = $1552p/m

    This would have to go to a bank that will not include a nominal rental expense for people living at home.

    I think she could potentially get more than $400k!
     

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