Is the bonus income accepted by lenders?

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Sanyuktaa
Posts: 6
Joined: Tue Mar 20, 2018 9:24 pm

Is the bonus income accepted by lenders?

Postby Sanyuktaa » Fri Jun 08, 2018 12:36 pm

Hi Home Loan Experts.

I work as equity research analyst at JP Morgan Sydney. My annual package of $105,000 includes an cash bonus of $35,000. I’m thinking of buying a house circa $600,000 in Liverpool area and I need to borrow money from the bank to complete the purchase.

I wanted to know whether lenders consider my bonus income for determining my borrowing power? Hope to hear from your team soon.

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Otto Dargan
Mortgage Specialist
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Joined: Sat Sep 06, 2008 5:55 pm
Location: Sydney, Australia
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Re: Is the bonus income accepted by lenders?

Postby Otto Dargan » Fri Jun 08, 2018 1:52 pm

Hi Sanyuktaa. Welcome to the forums.

Lenders regard bonus income as a very unreliable and unpredictable measure of consistent income in comparison to regular monthly salary. However, each lender may have a different policy for how they will assess bonus income.

Some lenders assess more leniently and consider bonuses as a stable form of earnings while other lenders don’t consider income from bonus altogether while calculating your borrowing capacity. This is because these forms of earnings are mostly based on the employee’s overall performance and is often paid at the employer’s discretion.

The consistency and the frequency of the bonus payment may largely determine whether the lenders will accept the bonus income or not such as:
  • Monthly or quarterly bonuses: One of our lenders can accept 100% of your bonus if it is regularly paid. Also, you have to provide a letter from your employer confirming that the payment is regular and ongoing.
  • Annual bonuses: One of our lenders may accept 100% of your annual bonus however you will be required to provide evidence of a two year history of your earnings in order to prove that this income is ongoing.
  • Performance based bonuses: These bonuses may be included in your assessment depending on the regularity of your bonus receipt in the past and for how long you have been receiving them.
  • Irregular bonuses: If your bonus is irregular then it will be assessed on a case by case basis.
  • One off bonuses: One-off bonus income isn't usually included as part of your additional income.
So, if you have a minimum three-month history of receiving bonuses, then you can borrow up to 90% of the property value and if you have a two year history of bonus income then you can borrow up to 95% of the property value.

Please enquire online or call us on 1300 889 743 and know how much of your bonus income will be accepted by the banks and which institutions are likely to lend.

Cheers,
Otto Dargan
Mortgage Broker
P | 1300 889 743
Home Loan Experts

Sanyuktaa
Posts: 6
Joined: Tue Mar 20, 2018 9:24 pm

Re: Is the bonus income accepted by lenders?

Postby Sanyuktaa » Fri Jun 08, 2018 2:56 pm

Thanks for letting me know this stuff. My bonus is quite regular for now and it’s paid to me quarterly. I have worked in this same place for almost 4 years. Can you please let me know what loan types and features are available to me?

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Otto Dargan
Mortgage Specialist
Posts: 7021
Joined: Sat Sep 06, 2008 5:55 pm
Location: Sydney, Australia
Contact:

Re: Is the bonus income accepted by lenders?

Postby Otto Dargan » Fri Jun 08, 2018 3:59 pm

Hi Sanyuktaa,

You may be entitled to all loan types such as professional packages, standard loans, lines of credit, fixed rates. Also, we may get you basic loan discounts on the loans as well.

Similarly, all the loan features such as Interest only, 100% offset, redraw, extra repayments are available for you.

We have access to loan products from a considerable number of banks and lenders who can provide you with a home loan at affordable rates.

If you want to learn more about which banks will accept your bonus income as part of a serviceability assessment, then you can have a look at our website or call us on 1300 889 743 or fill out our free assessment form.

Cheers,
Otto Dargan
Mortgage Broker
P | 1300 889 743
Home Loan Experts

Sanyuktaa
Posts: 6
Joined: Tue Mar 20, 2018 9:24 pm

Re: Is the bonus income accepted by lenders?

Postby Sanyuktaa » Fri Jun 08, 2018 5:21 pm

Thanks for letting me know about these features. I’ll give you a call to see if it possible for me to qualify for a loan with bonus income. Speak to you soon!


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