Join Australia's most dynamic and respected property investment community

Broker needed with salary packaging experience

Discussion in 'Property Finance' started by Rayan, 13th Aug, 2016.

  1. Rayan

    Rayan Active Member

    Joined:
    15th Dec, 2015
    Posts:
    37
    Location:
    Sydney
    Hi Former Somersoft and new PC members,

    I am desperate for some help.

    Purchased an investment property in Balmain on 27th July. Took my application material to a mortgage choice broker (not from this forum) as it was a very simple application (no other debts, liabilities or properties, no defaults or recent credit applications, PAYG income gross $170k last financial year, stable FT employment with NSW Health).

    Broker submitted my application with Westpac for 80% on 29th July. Since then its been nothing but hassles and delays. Two weeks of asking for more and more information about salary packaging and how it works and what it involves and more letters from employers about it etc etc

    Today he has come back to tell me they won't accept the salary packaging as income at all!!

    Salary Packaging is a common benefit available to anyone in NSW Health which lifts our tax free threshold to $28k each year.

    Are there any brokers out there who have experience presenting a deal with salary packaging to lenders who can help me?

    My broker wants me to submit to someone else but I am not going further with him- I need an experienced broker who can get this deal over the line with Westpac or someone else.
     
  2. Terry_w

    Terry_w Solicitor, Finance Broker, CTA Business Member

    Joined:
    18th Jun, 2015
    Posts:
    8,952
    Location:
    Sydney
    I got one of these through with westpac recently for a doctor. I am not taking clients atm but most of the brokers on here should be able to assist -unless you just cannot service.
     
    Rayan likes this.
  3. Rayan

    Rayan Active Member

    Joined:
    15th Dec, 2015
    Posts:
    37
    Location:
    Sydney
    If you choose to make an exception re: not taking new clients let me know. I revere your posts and it definitely services. Not even desperate for 80%. Would be quite happy with 70% but just want someone who can get it done!

    Problem is mainly my broker doesn't understand it himself- so if you have a grasp of it and have recently dealt with an assessor at Westpac who understands it then the deal services at 80% with them.

    Valuation has been done and is perfect as is all the other application material.
     
  4. Rolf Latham

    Rolf Latham Inciteful (sic) Staff Member Business Plus Member

    Joined:
    14th Jun, 2015
    Posts:
    1,158
    Location:
    Gold Coast
    Is there a liability associated with the sal pack ie a car ? Or is it just straight meal entertainment credit card , mortgage sll sac ?

    Ta
    Rolf
     
  5. Rayan

    Rayan Active Member

    Joined:
    15th Dec, 2015
    Posts:
    37
    Location:
    Sydney
    There is no liability. It is simply a way to receive an extra $9095 per year tax-free that is offered to NSW Health employees as a benefit of working for public hospitals.

    To receive the benefit you do need to provide the salary packaging department with evidence of an old liability, such as a home mortgage or credit card etc, and they then implement an ongoing benefit to you of $9095 per year tax free.
     
  6. Shahin_Afarin

    Shahin_Afarin Residential and Commercial Broker Business Member

    Joined:
    18th Jun, 2015
    Posts:
    641
    Location:
    Sydney
    Westpac recently introduced a policy whereby they need an employers letter for any salary deductions its a bit like a fart in a lift - completely unnecessary.

    Is there a specific reason you are using Westpac? Is it servicing or something else?
     
    Terry_w likes this.
  7. Rolf Latham

    Rolf Latham Inciteful (sic) Staff Member Business Plus Member

    Joined:
    14th Jun, 2015
    Posts:
    1,158
    Location:
    Gold Coast
    Westpac have no issue with that at all usually.

    In fact I don't know any lender that has an issue with it. WBC will usually even take the grossed up component of that,whereas cba dont.

    On the surface, I'd say there is more to the raeson that they don't want to do the deal. WBC credit can be very sticky.

    Ta
    Rolf
     
  8. tobe

    tobe Well-Known Member

    Joined:
    18th Jun, 2015
    Posts:
    879
    Location:
    Melbourne
    I've done a lot of loans for people in health or charity. Lenders don't get it. They mix it up with salary packaging, which is completely different.

    Unfortunately there aren't many lenders who actually use the grossed up net income. They either can't get their head around it or specifically exclude it. Last time I looked, in April, it was nab broker by exception (where I placed the deal) and ME bank who specifically have it in their policy.

    With the changes to lending policy and changes to max salary sacrifice amount ($19,000?) it doesn't make a great deal of difference to capacity anymore. But every little bit helps.
     
  9. Jess Peletier

    Jess Peletier Mortgage Broker - Australia Wide Business Member

    Joined:
    18th Jun, 2015
    Posts:
    2,756
    Location:
    Perth WA
    I've done a few with this - most lenders will treat it like normal taxable income, you just need to explain it clearly in your notes.
     
  10. Rayan

    Rayan Active Member

    Joined:
    15th Dec, 2015
    Posts:
    37
    Location:
    Sydney
    No particular reason it went to Westpac- they and the broker said it would service and 2 weeks after a formal application was lodged credit team are having massive issues understanding this portion of my payslip.

    If ME have it in their policy - in what way- do you mean they understand and accept it?
     
  11. tobe

    tobe Well-Known Member

    Joined:
    18th Jun, 2015
    Posts:
    879
    Location:
    Melbourne
    It's specifically stated in their credit policy document.
     
  12. Colin Rice

    Colin Rice Mortgage Broker Australia Wide Business Member

    Joined:
    9th Jul, 2015
    Posts:
    1,078
    Location:
    Perth
    Westpac policy for salary sacrifice is to add the FBT portion on the PAYG Summary to the gross payments to give a total gross figure. Base salary is 100% and anything over and above is shaded at 80%.
     
  13. Peter_Tersteeg

    Peter_Tersteeg Finance broker and strategist Business Member

    Joined:
    18th Jun, 2015
    Posts:
    2,091
    Location:
    Melbourne, Nationwide
    I think you'll find just about any broker with a few years experience has encountered this scenario many time s before. It's common in public health and charitable organisations.

    I often find that Westpac can be a bit illogical with various income sources. I think they only want the really straight forward vanilla stuff.

    These sort of things are often run through a third party packaging company, such as Maxia. They can easily provide statements which can go a long way to satisfying an ill informed credit assessor.
     
    JacM likes this.
  14. Air_Bender

    Air_Bender Well-Known Member

    Joined:
    9th Jan, 2016
    Posts:
    56
    Location:
    Melbourne
    That is really weird.

    I also work in the Health Industry (VIC), for 2 separate organisations and Salary Package with both. I've had no issues applying for a loan when I bought my PPOR earlier this year.

    Didn't use a broker though. Applied directly through the bank and didn't have to explain anything nor was I asked to provide a letter from my employers.

    I hope you get sorted in time for settlement.

    Good luck.
     
  15. Steven Ryan

    Steven Ryan Mortgage Broker Business Plus Member

    Joined:
    18th Jun, 2015
    Posts:
    2,458
    Location:
    Sydney & Gold Coast
    Westpac have been a pain with sal sac apps of late but with the letter from employer, not sure why it's an issue unless there's more to it.

    There's plenty of great brokers on here. Drop one a line.
     
    Terry_w likes this.
  16. Brady

    Brady Well-Known Member

    Joined:
    18th Jun, 2015
    Posts:
    452
    Location:
    Adelaide, SA
    Shouldn't be a problem - SalSac very common for health industries. Sounds a bit strange that this would be there problem.
     
    Last edited by a moderator: 22nd Aug, 2016
    Terry_w likes this.
  17. Marty McDonald

    Marty McDonald Mortgage broker Business Member

    Joined:
    22nd Jun, 2015
    Posts:
    228
    Location:
    Sydney North Shore and Norther beaches
    I take the gross salary less the pre tax deduction and use that as the taxable income figure. I then show the FBT exempt payment hitting the bank account as a net payment per fortnight and include it as tax free income / like family payments etc.

    Never had a problem with this.
     
  18. Jess Peletier

    Jess Peletier Mortgage Broker - Australia Wide Business Member

    Joined:
    18th Jun, 2015
    Posts:
    2,756
    Location:
    Perth WA
    @Marty McDonald I tried this with St G and ran it passed their broker assist to confirm ,lodged only to get told they only do this for religious workers.

    WBC and st g are crap at anything out of the box.
     
    Colin Rice likes this.
  19. Colin Rice

    Colin Rice Mortgage Broker Australia Wide Business Member

    Joined:
    9th Jul, 2015
    Posts:
    1,078
    Location:
    Perth
    If they allow you to differentiate in the calculator it can work. Many dont distinguish between pre tax and post tax income!

    I use both a fair bit (A+ with Westpac & Flame with St G) and depends on the assessor you get. The less bright ones, we need to "educate them" and provide extra info like salary packaging agreements and letters from employers to overcome objections.

    Not to brag but rarely get a decline with either unless client doesn't tell me everything or does something untoward like stop making mortgage payments cause we are refinancing / restructuring!
     
    Jess Peletier likes this.
  20. Jess Peletier

    Jess Peletier Mortgage Broker - Australia Wide Business Member

    Joined:
    18th Jun, 2015
    Posts:
    2,756
    Location:
    Perth WA
    Did all that, it passed anyway but makes me not have any trust them for new deals - if you do everything right and still (almost) have the rug pulled out, that's crap.
     
    Colin Rice likes this.