• 𝐂𝐚𝐧 𝐈 𝐚𝐩𝐩𝐨𝐫𝐭𝐢𝐨𝐧/𝐬𝐩𝐥𝐢𝐭 𝐦𝐲 𝐝𝐞𝐛𝐭 𝐨𝐫 𝐥𝐢𝐯𝐢𝐧𝐠 𝐞𝐱𝐩𝐞𝐧𝐬𝐞𝐬 𝐰𝐢𝐭𝐡 𝐦𝐲 𝐬𝐩𝐨𝐮𝐬𝐞 𝐭𝐨 𝐡𝐞𝐥𝐩 𝐦𝐞 𝐛𝐨𝐫𝐫𝐨𝐰 𝐦𝐨𝐫𝐞?

• 𝐃𝐨 𝐦𝐲 𝐩𝐞𝐭𝐬 𝐜𝐨𝐬𝐭 𝐦𝐞 𝐦𝐲 𝐛𝐨𝐫𝐫𝐨𝐰𝐢𝐧𝐠 𝐜𝐚𝐩𝐚𝐜𝐢𝐭𝐲?

• 𝐁𝐚𝐝 𝐜𝐫𝐞𝐝𝐢𝐭?

• Does HECS affect my borrowing capacity?

𝐓𝐡𝐞𝐬𝐞 𝐚𝐫𝐞 𝐬𝐨𝐦𝐞 𝐨𝐟 𝐨𝐮𝐫 𝐦𝐨𝐬𝐭 𝐩𝐨𝐩𝐮𝐥𝐚𝐫 𝐥𝐞𝐧𝐝𝐢𝐧𝐠 𝐪𝐮𝐞𝐬𝐭𝐢𝐨𝐧𝐬 𝐭𝐡𝐢𝐬 𝐰𝐞𝐞𝐤.

✅𝐇𝐄𝐂𝐒 (𝐡𝐢𝐠𝐡𝐞𝐫 𝐞𝐝𝐮𝐜𝐚𝐭𝐢𝐨𝐧 𝐜𝐨𝐧𝐭𝐫𝐢𝐛𝐮𝐭𝐢𝐨𝐧 𝐬𝐜𝐡𝐞𝐦𝐞).

YES. Your HECS debt will have a negative impact your borrowing capacity. HECS repayments are calculated based on your gross annual income before tax not on the remaining/outstanding balance of your HECS. Your HECS balance can be a little as $500 or as higher as $50,000, the monthly repayments will still be the same.

✅ 𝐀𝐩𝐩𝐨𝐫𝐭𝐢𝐨𝐧𝐢𝐧𝐠 𝐚 𝐣𝐨𝐢𝐧𝐭 𝐝𝐞𝐛𝐭 𝐨𝐫 𝐨𝐧𝐠𝐨𝐢𝐧𝐠 𝐜𝐨𝐦𝐦𝐢𝐭𝐦𝐞𝐧𝐭𝐬.

YES. On a case by case and bank by bank basis. If you’re in a spousal relationship and if both you and your spouse can demonstrate to the bank that your spouse, who is not a party to the proposed loan, can service their own portion of the existing liabilities. Household living expenses including childcare and private school fees etc. cannot be apportioned.

✅ 𝐁𝐨𝐧𝐮𝐬 𝐚𝐧𝐝 𝐧𝐨𝐧-𝐛𝐚𝐬𝐞 𝐢𝐧𝐜𝐨𝐦𝐞 (𝐚𝐥𝐥𝐨𝐰𝐚𝐧𝐜𝐞𝐬, 𝐨𝐯𝐞𝐫𝐭𝐢𝐦𝐞, 𝐬𝐡𝐢𝐟𝐭 𝐚𝐥𝐥𝐨𝐰𝐚𝐧𝐜𝐞, 𝐅𝐈𝐅𝐎, 𝐖𝐀𝐅𝐇).

80% of your bonus income can be included as part of the borrowing capacity calculations but only if you can demonstrate consistency of this income for two previous years.

Meaning if received $1,000 in bonus payment in FY23. Then $800 can be used for servicing.

Essential allowances such as working away from home, fly-in fly-out, uniform allowance, car allowance, shoe allowance, shift allowance can all be considered of up to 100% on a bank-by-bank basis.

✅ 𝐋𝐢𝐯𝐢𝐧𝐠 𝐚𝐭 𝐡𝐨𝐦𝐞 𝐰𝐢𝐭𝐡 𝐩𝐚𝐫𝐞𝐧𝐭𝐬 𝐫𝐞𝐧𝐭-𝐟𝐫𝐞𝐞.

If you’re living at home with your parents rent-free, then the bank will automatically factor in $650 per month as your rental expense. This known as “notional rent”.

✅ 𝐁𝐚𝐝 𝐜𝐫𝐞𝐝𝐢𝐭 (𝐜𝐫𝐞𝐝𝐢𝐭 𝐢𝐦𝐩𝐚𝐢𝐫𝐦𝐞𝐧𝐭).

Can be considered on a case by case and lender by lender basis. Your loan to value ratio would need to be 80% or less.

But how bad is bad? How does a bank/lender determine an applicant’s credit worthiness? I will cover this topic on my next post.

✅ 𝐃𝐨𝐞𝐬 𝐚𝐠𝐞 𝐩𝐥𝐚𝐲 𝐚 𝐛𝐢𝐠 𝐩𝐚𝐫𝐭 𝐢𝐧 𝐥𝐞𝐧𝐝𝐢𝐧𝐠?

Yes and No. Banks and non-bank lenders do not have age discrimination or restrictions, it is all about sound exit strategy.

A sound exit strategy pretty much interpreted as what can the borrower do to repay the loan back in full without needing to sell their principal place of residence or being in financial hardship.

Even though most Banks say that they don’t have age restrictions, but they tend to favour younger individual borrowers based on the assumption that younger borrowers have a longer working life.

For example: a 60-year-old borrower would potentially stop working within 5 years from the date of obtaining the loan vs a borrower in their 30s.

✅ 𝟏 𝐲𝐞𝐚𝐫 𝐬𝐞𝐥𝐟-𝐞𝐦𝐩𝐥𝐨𝐲𝐞𝐝 𝐢𝐧𝐜𝐨𝐦𝐞 𝐯𝐞𝐫𝐢𝐟𝐢𝐜𝐚𝐭𝐢𝐨𝐧.

On a case by case and bank by bank basis. Major banks can consider one year income documents to verify a self-employed applicant’s income.

Traditionally 2 years financials are required by all lenders. Although there still a lot of the banks out there that still requesting for 2 years income documents.

✅ 𝐃𝐨 𝐦𝐲 𝐩𝐞𝐭𝐬 𝐜𝐨𝐬𝐭 𝐦𝐞 𝐦𝐲 𝐛𝐨𝐫𝐫𝐨𝐰𝐢𝐧𝐠 𝐜𝐚𝐩𝐚𝐜𝐢𝐭𝐲?

YES, absolutely. Your pet expenses will form part of your overall household living expenses.

Your children under the age of 18 and spouse who are financially dependent on your financial support will also add a negative impact to your borrowing capacity.

𝐀𝐬 always, 𝐢𝐟 𝐲𝐨𝐮 𝐡𝐚𝐯𝐞 𝐚𝐧𝐲 𝐨𝐭𝐡𝐞𝐫 𝐪𝐮𝐞𝐬𝐭𝐢𝐨𝐧𝐬 feel free to reach out to one of our team members at CCS Lending.