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Business credit cards affect serviceability?

Discussion in 'Property Finance' started by ryau86, 9th Oct, 2015.

  1. ryau86

    ryau86 Member

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    If a person is applying for a home loan, but is also a guarantor of a business credit card, will banks see this as an outgoing against her personal income (at the time of applying for a home loan)?
     
  2. Peter_Tersteeg

    Peter_Tersteeg Finance broker and strategist Business Member

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    Technically yes, because you generally spend on the business CC, then have to request the funds to be reimbursed. If the company won't give you the funds, you have to pay off the card.

    Keep the limit as small as possible.
     
  3. Jamie Moore

    Jamie Moore MORTGAGE BROKER - AUSTRALIA WIDE Business Member

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    Usually added as a liability - but interest charged on liabilities can generally be added back too.

    Agree with Pete - best to keep limit low so it doesn't become too burdensome on your borrowing capacity.

    Cheers

    Jamie
     
  4. Be Developer

    Be Developer Property Developer Business Member

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    I guess any cc will dampen serviceability!

    @Redom discussed this topic in detail in one if his post not long ago! You may want to look up that thread!
     
  5. superace

    superace Member

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    I've always had to include mine in any serviceability calcs. My business has a company credit card of which I am the guarantor/personal liability. So I ended up lowering the limit from the $8000 that they gave me to a more comfortable $3000. This allows me to operate with it without hindering my personal borrowing/serviceability too much.
     
  6. Corey Batt

    Corey Batt Finance Strategist Business Plus Member

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    Adelaide, SA
    If you're a PAYG with corporate card which is paid by the company, generally note it and provide letter from the company stating this is for business and not personal use.