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High equity, low income.

Discussion in 'Property Finance' started by Vacant, 30th Jul, 2015.

  1. Vacant

    Vacant Well-Known Member

    Joined:
    18th Jun, 2015
    Posts:
    111
    Location:
    Port Stephens
    What are the chances of getting a loan if you have high equity but low income.

    Here's the scenario-

    My fathers business has been struggling the last few years. A combination of splitting with a business partner and environmental issues have put a spanner in the works.

    He owns a $750k property and I think borrowed about $200k to inject into the business. Does he have any chance in getting finance or will he have to wait it out until his business starts making a profit again?
     
  2. Jamie Moore

    Jamie Moore MORTGAGE BROKER - AUSTRALIA WIDE Business Member

    Joined:
    18th Jun, 2015
    Posts:
    2,159
    Location:
    Canberra and Sydney
    It's hard to comment based on the limited info provided but generally speaking - equity alone doesn't allow you to borrow.

    It's income and the ability to demonstrate that you can service a debt that does.

    Cheers

    Jamie
     
  3. Vacant

    Vacant Well-Known Member

    Joined:
    18th Jun, 2015
    Posts:
    111
    Location:
    Port Stephens
    I thought that was the case. To prove that he could service the debt would he need a couple of years worth of records and tax returns etc. or could you get by on a couple of BAS statements or something?

    Basically trying to figure out what kind of a timeline he'd be looking at should things start looking up, which they seem to be. He's been offered bridging finance for a development site he was interested in but that doesn't really appeal.