Each lender has it’s own method of calculating the maximum loan they feel you can afford. Some of the areas where they vary include:
- The benchmark interest rate used - a higher rate ensures a bigger buffer but lowers the maximum borrowing limit
- The living allowance estimate
- Whether or not tax deductions received on investment loans are considered, and
- The rate used to calculate the repayments on debts with other lenders
The differences mean that a couple with two $50,000 incomes who wish to borrow for investment purposes could borrow $300,000 more with one lender than they could with another and there are a whole host of options in between.
This is a massive difference and can have a huge affect on investment potential. By selecting lenders carefully, splitting loans between lenders and using the lenders in a particular order your borrowing capacity can be maximized, which in turn will allow you to maximise investment opportunities.
No comments:
Post a Comment