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by Otto Dargan
Wed Sep 18, 2019 12:10 pm
Forum: Home Loan Forum
Topic: How is DTI calculated? DTI and LTI - What's the difference?
Replies: 5
Views: 22

Re: How is DTI calculated? DTI and LTI - What's the difference?

Hi Anwar, Yes, personal and business loans for sole traders will need to be included in the DTI calculations. In addition, for revolving credit such as credit cards and overdraft, the full limit is to be used irrespective of the balance. So say you have a $10,000 cc with $1,000 balance (used) and an...
by Otto Dargan
Tue Sep 17, 2019 8:59 pm
Forum: Home Loan Forum
Topic: How is DTI calculated? DTI and LTI - What's the difference?
Replies: 5
Views: 22

Re: How is DTI calculated? DTI and LTI - What's the difference?

Hi Anwar, For self-employed borrowers , the income to be used for the DTI calculations is net profit before tax after acceptable add-backs . Yes, you can use the full gross (unshaded) rental and dividend income before tax. As for the liabilities part for the DTI calculation, the total of all loans i...
by Otto Dargan
Tue Sep 17, 2019 8:22 pm
Forum: Home Loan Forum
Topic: How is DTI calculated? DTI and LTI - What's the difference?
Replies: 5
Views: 22

Re: How is DTI calculated? DTI and LTI - What's the difference?

Hello Anwar. Welcome to the forums. Debt-to-income (DTI) ratio is a borrower’s total debt divided by their total income. DTI ratio is calculated as follows: total debt (including the new loan limit) / total income = DTI ratio For example, 400,000/ 80,000 = The DTI ratio is 5. A DTI ratio of six or h...
by Otto Dargan
Tue Sep 17, 2019 8:16 pm
Forum: Home Loan Forum
Topic: Loan for second property
Replies: 1
Views: 13

Re: Loan for second property

Hi Jason, welcome to the forum. Based on what you’ve mentioned so far, yes you can borrow the full purchase price plus costs to complete the purchase without paying Lenders Mortgage Insurance (LMI) fees. Avoiding LMI can save you tens of thousands of dollars. There are some great interest rates on o...
by Otto Dargan
Tue Sep 17, 2019 8:13 pm
Forum: Home Loan Forum
Topic: What is the First Home Loan Deposit Scheme and how does it benefit first home buyers?
Replies: 5
Views: 21

Re: What is the First Home Loan Deposit Scheme and how does it benefit first home buyers?

Hi James, You can keep updated on our page on First Home Loan Deposit Scheme which will be updated with the latest information as it comes. Yes, there are ways you can increase your chances of loan approval which constitutes the normal bank lending criteria: ⋅ Be employed in the current jo...
by Otto Dargan
Tue Sep 17, 2019 7:46 pm
Forum: Home Loan Forum
Topic: What is the First Home Loan Deposit Scheme and how does it benefit first home buyers?
Replies: 5
Views: 21

Re: What is the First Home Loan Deposit Scheme and how does it benefit first home buyers?

Hi James, While information regarding the eligibility and qualification of the scheme has not been fully-fledged out at the time of writing this, it has been confirmed that: ⋅ The First Home Loan Deposit Scheme will only be available to 10,000 first home buyers in a year. ⋅ It wi...
by Otto Dargan
Tue Sep 17, 2019 7:22 pm
Forum: Home Loan Forum
Topic: What is the First Home Loan Deposit Scheme and how does it benefit first home buyers?
Replies: 5
Views: 21

Re: What is the First Home Loan Deposit Scheme and how does it benefit first home buyers?

Hello James. Welcome to the forums. The First Home Loan Deposit Scheme is an initiative offered by the government to get first home buyers into the property market sooner, even with a smaller deposit. Under the scheme, you would only need to save a 5% deposit of the property value without having to ...
by Otto Dargan
Mon Sep 16, 2019 8:25 pm
Forum: Home Loan Forum
Topic: Can I buy a second place and rent out my first property without providing deposit?
Replies: 5
Views: 207

Re: Can I buy a second place and rent out my first property without providing deposit?

Hi Susan, Negative gearing is when the rental income is less than your interest repayments and other expenses relating to the property; essentially, you're making a loss. It is calculated by first deducting the costs for the property or cash operating expenses from the rental income you receive. Thi...
by Otto Dargan
Mon Sep 16, 2019 8:10 pm
Forum: Home Loan Forum
Topic: Can I buy a second place and rent out my first property without providing deposit?
Replies: 5
Views: 207

Re: Can I buy a second place and rent out my first property without providing deposit?

Hi Susan, Different lenders will assess your rental income differently. As a general rule, lenders will take 80% of your gross rental income along with other income, such as your salary, to calculate your borrowing power . However, some will only use 75% of the rent, and some won’t apply tax to the ...
by Otto Dargan
Mon Sep 16, 2019 7:49 pm
Forum: Home Loan Forum
Topic: Can I buy a second place and rent out my first property without providing deposit?
Replies: 5
Views: 207

Re: Can I buy a second place and rent out my first property without providing deposit?

Hello Susan, Welcome to the forums and thank you for reaching out to us. You can use your equity to buy a second property even with no deposit . A home equity loan basically lets you borrow against the equity you have in your home and invest it in another property, renovate , repay your debts (conso...
by Otto Dargan
Fri Sep 13, 2019 8:11 pm
Forum: Home Loan Forum
Topic: How much of a debt can I consolidate into my mortgage?
Replies: 5
Views: 84

Re: How much of a debt can I consolidate into my mortgage?

Hi Topeka, Yes, some lenders do request a property revaluation as a safeguard against borrowers who might default . If you feel like the property valuation has come up short, you can challenge the valuation . However, make sure to understand why the valuation came low as the success rate for a succe...
by Otto Dargan
Fri Sep 13, 2019 8:03 pm
Forum: Home Loan Forum
Topic: How much of a debt can I consolidate into my mortgage?
Replies: 5
Views: 84

Re: How much of a debt can I consolidate into my mortgage?

Hi Topeka, When looking into refinancing to consolidate debts , you should be aware of the following factors: ⋅ Make sure to cross-check the interest rates of the old and new home loans, as the interest rate will indicate what your repayments will be. You'll also need to decide on whether ...
by Otto Dargan
Fri Sep 13, 2019 7:47 pm
Forum: Home Loan Forum
Topic: How much of a debt can I consolidate into my mortgage?
Replies: 5
Views: 84

Re: How much of a debt can I consolidate into my mortgage?

Hello Topeka. Thank you for reaching out to us and welcome to the forums. Refinancing for debt consolidation might be a good option if you're struggling with making payments. How it works is that you will be taking all your debts and rolling them into your mortgage, making it easier to manage your f...
by Otto Dargan
Thu Sep 12, 2019 8:32 pm
Forum: Home Loan Forum
Topic: Using personal loan as a house deposit. A bad idea?
Replies: 5
Views: 74

Re: Using personal loan as a house deposit. A bad idea?

Hi Tabitha, What matters to lenders is how much is the remaining loan amount against the value of your property. The ideal time to remove the guarantee is when you owe less than 80% of the loan to value ratio of the value of your property. For example, if your loan amount was $650,000 on a $700,000 ...
by Otto Dargan
Thu Sep 12, 2019 8:29 pm
Forum: Home Loan Forum
Topic: Using personal loan as a house deposit. A bad idea?
Replies: 5
Views: 74

Re: Using personal loan as a house deposit. A bad idea?

That sounds about right. I do not want to keep my mom as a guarantor for a long time. So, how do I know the right time to remove her as a guarantor?

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