Often, we are asked “How much income do I need to buy a property?” Of course, the real questions you want to ask are what do I really want and how much can I afford? But rarely do people start by designing their ultimate life or their own budget. This reminds me of a fabulous book and test I have used called the Passion Test by Janet Bray Attwood. One of the techniques Janet recommends is IAN – Intention, Attention, No Tension – so what you focus your attention on grows stronger in your life. However, just wishing for greater income is not going to do it, but focusing on growing your income and utilising every part of it can help us when getting YOU a loan.
So what income can we use?
PAYG Income: For those of you who are pay as you go or receive a payment for work from others, you can use:
- Your usual income – when you are on probation, casual or a contractor (shown through payslips & three months of deposits to your bank accounts and a call to your employer)
- Bonuses – usually last two years shown through payslips and payment summaries (which you should receive in the next two weeks from your employers, the lower or average of the last two)
- Overtime – usually shaved by 20% by lenders and again proven over 2 years
- Work allowances – such as site allowances, travel income etc (again you need to show this is usual in your work and consistent over two years)
- Pensions – including family benefits evidence from MyGov – statement & letter
- Child Support
- Rental income – now shaved to a maximum of 80%
- Income from shares
- Bank account interest income
Business Income: most lenders are reviewing:
- your last two years personal tax returns;
- your last two business returns;
- your businesses financial statements (profit and loss and balance sheet for last two years) to show how your business is actually running; plus
- your Notices of Assessment from the ATO
If you are running your business on a casual basis, we might still be able to use the income. Most of the time you need an ABN which has been in effect for over 12 months and then we can possibly get you a loan, EVEN if you have received 3 months of Uber income! (subject to lenders credit criteria. fees and charges will apply)
Interestingly, we have now found we can borrow for renovating and flipping before you sell, landscaping work, medical and dental procedures such as tummy tucks or wisdom teeth extractions, and for new and expanding businesses and cars. The longer the period, the higher the interest rate but shorter terms can get you a rate starting as low as 3.7%* at the moment (subject to lenders credit criteria, fees and charges will apply)
We can also source Green Loans to fund the purchase of renewable products such as solar panels, batteries, solar hot water systems, air source heat pumps etc. over a 3 -7 year period so you can borrow and get the benefit immediately, and pay the cost off slowly, which can be beneficial.
*Personal loan repayment terms range from 6 months to 5 years. Interest rates range from 3.7% (comparison rate 10.01%) to 9.6% (comparison rate 11.45%), subject to change depending on the rates offered by lenders in our Lending Markets.
Interest rates are correct as at 18 January 2017 and subject to change at any time. The comparison rate is based on a loan amount of $10,000 over a 3 year term. WARNING: This comparison rate is true only for the example given and may not include all fees and charges. Different terms, fees or other loan amounts might result in a different comparison rate.
Just in time for Small Business Festival
We are part of this year’s Victorian Small Business Festival again (see free tickets for our Aug 8 webinar and Aug 18 seminar) and are going to have a stand at Business Chicks on 24-25 August too. We would love to see you there!
If you want to discuss any of this further, please call 0412 709 200.
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