Share dividends and serviceability

Discussion in 'Loans & Mortgage Brokers' started by Jamesaurus, 1st Nov, 2021.

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  1. Jamesaurus

    Jamesaurus Well-Known Member

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    18th Dec, 2017
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    Canberra
    One for the brokers:
    - At present would you need 1-2 years dividend history for shares to be considered for investment loan serviceability purposes?
    - Are banks shaving that income e.g. if getting 50k in net dividends (say 1m and 5%net yield) would they add the 50k to your income calculations or less than that?
     
    Jamesaurus, 1st Nov, 2021
    #1
  2. Lindsay_W

    Lindsay_W Well-Known Member

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    Depends on the lender
    Some want to see 2 years consistency in your personal tax returns average of the last 2 years/lower of the last two years.
    Some lenders will apply a % of the total value of the investment, regardless of how long you've held it.
    Most cap out at approx 6% return MAX
    Some lenders will shade the income to 80% of the total amount being received
     
    Lindsay_W, 1st Nov, 2021
    #2
  3. Terry_w

    Terry_w Lawyer, Tax Adviser and Mortgage broker in Sydney Business Member

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    some won't even take into account divs
     
    Terry_w, 1st Nov, 2021
    #3
    Lindsay_W likes this.