Do I have any borrowing power?

Discussion in 'Loans & Mortgage Brokers' started by stevens, 9th Jun, 2021.

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  1. stevens

    stevens New Member

    Joined:
    2nd Jun, 2021
    Posts:
    1
    Location:
    Sydney
    I have two IPs and looking to purchase a third but Big 4 bank manager said "no".
    Combined loan value $1.95m
    Combined property value $3.5m
    Monthly repayments $7,200
    Monthly rental income $5,000
    Monthly salary $14,000 (gross)
    Monthly living expenses $2,500
    Savings $240,000
    One credit card ($8,000 limit)
    In my 40s with no wife or kids. No other debt.
     
    stevens, 9th Jun, 2021
    #1
  2. Tony Xia

    Tony Xia Structured Loan Advisor Business Member

    Joined:
    23rd Aug, 2015
    Posts:
    1,577
    Location:
    Bella Vista
    Hey buddy,

    Im sure any broker here is able to help you out and see what your borrowing capacity is with different lenders.

    Best to reach out, have a chat about your whole situation a little better and understand what you're trying to do and buy.
     
    Tony Xia, 9th Jun, 2021
    #2
  3. Chris B

    Chris B Well-Known Member

    Joined:
    26th Jun, 2015
    Posts:
    222
    Location:
    Melbourne
    I'm not surprised you were declined by a Big 4 bank, but you should still be able to get a loan.

    It will depend on how much you want to borrow, how much rent you will get, how much of your debt is for investment purposes, etc.
     
    Chris B, 10th Jun, 2021
    #3
  4. Rolf Latham

    Rolf Latham Inciteful (sic) Staff Member Business Plus Member

    Joined:
    14th Jun, 2015
    Posts:
    10,653
    Location:
    Gold Coast (Australia Wide)
    yes, very likely

    But with this limited data there isnt much feedback you can rely on.

    If all your current lending is with that big 4, thats likley one issue as to why they said no, with Debt to income ratio and total aggregate exposure being beyond their comfort zone.

    Structured the right way there are lots of options and often at lower variable rate cost than the big lenders

    ta
    rolf
     
    Rolf Latham, 10th Jun, 2021
    #4
    Lindsay_W likes this.
  5. David Hui

    David Hui Well-Known Member

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    26th Jul, 2017
    Posts:
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    Location:
    Brisbane, Queensland
    Yep, 100% speak to a broker. Policies vary enough between lenders that one might say 'not for us', and another will say 'we'll do that deal any day of the week'.
     
    David Hui, 10th Jun, 2021
    #5
  6. Lindsay_W

    Lindsay_W Well-Known Member

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    Posts:
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    Location:
    QLD/Australia Wide
    Couple of things;
    Rental income seems low - is that after all expenses or due to some other reason?
    What's your monthly rental expense? Are you renting or have a full paid PPOR or other living arrangement?
    Expected rental income from new property?

    best to engage a decent broker who can run actual numbers for you verified by real data as the info provided is not really enough to confirm if you have any capacity to borrow.
     
    Last edited: 10th Jun, 2021
    Lindsay_W, 10th Jun, 2021
    #6
  7. standtall

    standtall Well-Known Member

    Joined:
    19th Oct, 2015
    Posts:
    2,701
    Location:
    Sydney, NSW
    Agree - OP, you need to improve your cash flow on existing holdings.

    Plus it’s very unlikely new purchase will have any better yield given current market so you have to think whether you are comfortable taking on further losses even if tax deductible.
     
    standtall, 11th Jun, 2021
    #7