Investor Finance: How to Maximize Your Borrowing Power

More brokers means but the same pool of income means that the average income per broker will drop, but most of this drop is at the bottom end of the market. The new brokers who are still figuring out their market, or the older brokers that really aren't active, possibly transitioning into retirement or doing something else.

Indicative of this section observation is that a large percentage of brokers haven't written a loan in 6 months and as much as 45% have written less than $2M in that period. There's a lot of people registered with the MFAA that aren't really brokers. Instead they're accountants, financial planners or others that get the occasional opportunity to write a loan. They're not really brokers but they are included in these stats.

The lending environment is a tough one. It has been for a while and I think it will continue for a while longer. Tough times create challenges but also opportunities. I saw the GFC in 2008 and regulation in 2011. On both occasions a lot of brokers quit but those that remained were more successful than ever. 2015 was the beginning of APRA and for many this has create massive opportunities as well.

 

As a possible strategy iff an investor wanted to increase their serviceability, can they move in with their folks to get the loans through to the big 4 banks and indicate that they pay the minimum rent of $150 per week to their folks? While, this is happening increase their cash flow on their IPs and build granny flats?

 

If you move in with folks will be a big increase in borrowing capacity sure (the amount depends on what your saving on your existing debt/rental expense).

Re rent amount paid - if its free, most majors will take no expense. ANZ have a ~$375 p/m min rental for living at home arrangements.

Building granny flats help definitely.

The combo noted is decreasing expenses (big impact) & increasing income = good combo to improve servicing.

 

I did see that this morning. I reckon the extra brokers are predominantly eastern states based and may get a shake up now the boom is starting to wind down???

Seems like 20% are doing 80% of the business based on some of the stats quoted.

 

All lenders now take a nominal rental expense. Cba is the only exception and they will only allow a zero expense with a letter from the olds.

 

Agree it doesn’t really make much sense. Some of the notional rents are very low too, also doesn't make too much sense (not sure who's renting at 375 p.m long term in sydney, that'd be a tent 50km out).

 

Even a tent would cost you $40/night unpowered . $375/mth might be loitering fines on a park bench.