Maximising the amount a lender will hand over to you isn’t about trying to take on unmanageable levels of debt. It’s a matter of taking a few simple but smart steps that could mean the difference between toiling in that ‘fixer-upper’ or owning your dream home. 1. Shop around for lenders Different lenders define income in so many different ways that it pays to use a credit adviser who knows their way around what’s included and what’s not. One lender may allow share dividends as income, while another lender may…

There are many occasions which are suitable for Interest Only mortgage repayments . For example, when you earn a significant portion of variable income such as commission/bonus, for investment properties when you have owner occupied debt, maternity leave or if you are self-employed. Banks don’t automatically grant Interest Only repayments and may only allow them in certain situations. You will pay a premium for interest only of between 30-60 basis points above a principle & interest rate for the same product. Generally, the maximum term is 5 years interest only,…

Simply put a debt to income ratio is your total debts (including home loans, car loans, credit card limits etc) divided by your gross/taxable income. Borrowers will often ask what a bank will lend them as a multiple of their income. Six times income is considered reasonable but not necessarily an accurate indication of your borrowing capacity. And here’s why. Debt to income ratios or DTIs are used as a secondary borrowing capacity measure by Australian lenders. The primary measure is based on a household cash flow model. In essence a…