Loan Brokers and Borrowing Capacity issue

Discussion in 'Loans & Mortgage Brokers' started by Sunny347, 24th Jul, 2021.

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AM I Borrow upto 1.2 Million

  1. Yes

    1 vote(s)
    33.3%
  2. No

    2 vote(s)
    66.7%
  1. Sunny347

    Sunny347 Member

    Joined:
    24th Jul, 2021
    Posts:
    8
    Location:
    Sydney
    Hi All,

    I am new to the forum and needing some advise or help. Thank you to all in advance if you can provide valuable feedback.

    I am 37 years old male, working full time, with 1 child. Wife working casually very irregular income.

    I have a loan with NAB for 830K while my house valuation is 1.15 Million. I tried to take some equity out and take another loan for investment but they declined that they can't even give any equity out forget about loan. I asked if i can take $90K out plus put stamp duty from my pocket and buy a house for 450K in Brisbane. They said Declined. No reason given.

    When i put all my details in all the lenders website, they say my borrowing capacity is around 1.3 to 1.5 Million.

    Income:
    My base salary- AUD 170,000 (before tax without super)
    Car allowance- AUD 24,000 (Per annum)
    Bonuses- AUD 50,000 (Per Annum paid twice 6 monthly, very stable for the last 5 years).
    My credit score with credit agencies is 990 (Excellent). Never missed any payment in the last 10 years.
    6.5 years with the same company and progressed as General Manager now.

    Liabilities:
    Credit cards- AUD 15,000
    Car/Personal loan- AUD 700/Month
    Monthly expenses- AUD 3500/Month

    Expected rental income if i were to buy investment property is AUD400/Week.

    I have some friends whose base salary is way less than mine but have loan amount is much more. In my case since my wife is not working or very irregular salary, I prefer to take loan as single.

    I have 3 questions:

    1) Why did Nab declined all together?
    2) Do they consider car allowance as income?
    3) Bonus is so regular, do they consider it as full? AUD 50,000 is lowest of last 3 years.

    Can you suggest any other bank who can be bit more linent?

    Regards,
    Sunny
     
  2. Trainee

    Trainee Well-Known Member

    Joined:
    24th May, 2017
    Posts:
    10,256
    Location:
    Australia
    How much do you have in savings?

    talk to a good mortgage broker.
     
  3. Sunny347

    Sunny347 Member

    Joined:
    24th Jul, 2021
    Posts:
    8
    Location:
    Sydney
    Hi Trainee,

    I do have 70K in savings but i don't want to use it unless i have to. Idea is to use the house equity rather than throwing my cash. I have 70K+ invested in equities and funds which i could liquidate if necessary.

    I am shocked and frustrated by NAB rejection as they didnt even provide any reason. When i go to their website and add everything, it says my borrowing capacity is 1.4 Mil.
     
  4. Rolf Latham

    Rolf Latham Inciteful (sic) Staff Member Business Plus Member

    Joined:
    14th Jun, 2015
    Posts:
    10,598
    Location:
    Gold Coast (Australia Wide)
    Not even internal bank used service calculators can be relied upon all the time. The online ones are purely a marketing tool and loaded with disclaimers.

    Comparing your scenario to someone else's isnt valuable since you dont know

    The loan should never have been submitted by the banker if it failed by that much - this is a challenge where bankers ( and some brokers) are driven by silly KPIs, If Client Best Interest Duty applied to retail banks, they would have told you - cant do this, go and see lender X or a broker......

    There is possibly a loan there, just not structured that way.

    Refi to a more generous lender, reduce card limits, and or refi the car loan.

    That 15 k card alone is worth around 100 to 110 k in borrow cap, and the personal loan around 140 to 150 k, or half that once refinanced to a 30 year term ( youd still want to pay that off quickly, because a 30 yr term on a depreciating asset makes little sense aside from increasing borrow cap)

    Unless the banker made a boo boo, its unlikely you will get a better outcome with most major and second tier banks, since they are predicated by APRA to calculate borrowing capacity in a very similar way with most outcomes being with 5 % of each other.

    The decline might be a blessing in disguise so you can set the thing up properly and perhaps look at an active debt recycle strategy to take a few or a lot of years off the non deductible home loan

    In almost all challenges lies opportunity.............

    ta
    rolf
     
    Lindsay_W likes this.
  5. Tony Xia

    Tony Xia Structured Loan Advisor Business Member

    Joined:
    23rd Aug, 2015
    Posts:
    1,546
    Location:
    Bella Vista
    Facevalue it seems like it's doable, but there should be a way to better financially yourself and boast up your borrowing capacity with other lenders.

    Im surprised why the banker even submitted the loan if it didn't service ?

    I suggest you find someone who can provide you with a few scenarios before submitting to a lender.
     
  6. Lindsay_W

    Lindsay_W Well-Known Member

    Joined:
    1st Jul, 2015
    Posts:
    4,985
    Location:
    QLD/Australia Wide
    You need a good broker who can do this for you instead of going direct to bank.
     
  7. Sunny347

    Sunny347 Member

    Joined:
    24th Jul, 2021
    Posts:
    8
    Location:
    Sydney
    Thank you All for valuable feedback.

    I am going through a broker now who is working with Westpac and Bankwest to get the ball rolling.
     

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