Have I hit the debt to income ratio limit?

Hi propertychatter,

Looking to purchase investment property no. 3 but getting told that I have hit my debt to income ratio ceiling, looking for a second opinion.

Also looking for a new mortgage broker, as the old broker retired.

Current situation:
Income
Annual salary - 100k p.a.
Two IPs renting @ 465 and 320 pw each
live with parents, no rent, no credit car, no car loan, no dependent
Cash 130k
All properties in Brisbane

Debt
Two IP mortgages @ 380k and 220k each (property last valued a few month ago @ 750k and 390k)
Loan fix rate due in Nov. so looking to refinance shortly as well.
All mortgages under trust with NAB

Been told NAB that I can only borrow 300k more. Interested to see if a 600k purchase is possible, 470 additional mortgage.

 

It's gonna depend how you're structured - you might be okay with non-banks. Or, you might have options with other mainstream lenders if the trust properties are positively geared and you're not chipping in for them.

 

Do-able
Not with NAB but certainly other lenders, DTI limits vary form lender to lender.

DTI doesn't even appear to be that high currently, based on the numbers provided.
Are the properties cross secured with NAB?

 

DTI and borrowing capacity will vary from lender to lender. If all your properties are with NAB then you will have greater borrowing capacity elswhere.

Which lender/s you refinance to will play a part in the strategy as well.

 

Thanks for the advice. Idea would be to refinance with the who ever provide the best borrowing power for the third IP

 

Positively geared last financial year. Thanks for the info

 

Seems doable face value.

- rewrite both the loans over 30 years again to boast it up. Or
- go to a lender that don't have DTI limits, eg resimac, firstmac, liberty or pepper.

 

Even on numbers provided you might not have to refinance the whole lot, having all properties and loans with the one lender is a risk I would avoid, (all monies clause) and it is unlikely to give you the best outcome.

 

Hi Everyone. I've jumped into this thread as my partner and I are in a similar boat: We've reached out debt to income ratio cap and can't borrow anymore with our current bank. We have some good equity between us. Can anyone please give me some leads for non-banks, business finance, loan sharks...or any other ideas on ways to secure a loan outside of the traditional bank route? It would be pretty short term, and paid back within a year after we flip the property. Tony, I've noted your suggestions on lenders that don't have DTI limits, eg resimac, firstmac, liberty or pepper. Thanks

 

DTI is low, I'd be surprised if you've hit your limit there!

 

Top line the numbers look OK re: DTI. May be servicing which is more the issue given no interest addback due to the trust ownership?

If you can get an additional $300K would with NAB then I'd anticipate you'll be able to get to the $470K with lenders that provide better servicing. Some lenders use a lower notional rent value than NAB which may help.