Salary decrease and new loan

Hi,

I recently changed jobs but took a minor pay cut as it is a better company and prospects, approx. $200/month. I had released equity based on my previous salary.

I was looking to loan more for an IP which will mostly be funded from the equity release but ideally I would like to loan more.

My concern is that if I go them they might complain about the salary decrease and what could be the ramifications?

Thanks!

 

No ramifications on your existing debt that they've already lent to you. In Aus, they don't reassess your old loans and decide whether you need to pay them back. Once they've committed to the loan contract, they generally don't retest your existing debt commitments.

When seeking the new loan, they'll retest your servicing to determine what level of new debt they'd be willing to afford (not whether they should reduce your existing debt). The income drop will mean a lower borrowing capacity. If you have an existing pre approval, it'll be void too.

 

Won't be an issue for your previous loan - that's done and dusted.

It will come into play for your next loan - if the lender has an issue with it then see if you can find another lender that it's a better fit with (they have different methods of calculating max borrowing). Plenty of brokers on here that could help - a couple of good ones have already responded above.

Cheers

Jamie

 

Chat with your broker and get them to advise on the ramifications in relation to borrowing capacity with the decreased income and plan form there.