Portfolio
If your client is an investor, they may have discovered that not all lenders use all of their investment income to calculate their borrowing power. Traditionally, lenders accept the following income types:
- Dividends from ASX companies and private companies
- Managed Fund Income
- Interest Income
- Royalties
- Annuities
- Rent Income
However, just because the lender accepts these income types doesn’t mean that all of the rental income is used. For investors with many rental properties, a lender not using all of their rental income to calculate their borrowing power means they cannot afford a new loan. If their lender denies their loan application, they can’t increase their investment portfolio.
Non-traditional lenders and portfolio friendly considerations
If your client has a lot of investment properties, you should consider working with a specialty lender. Specialty lenders often have portfolio-friendly considerations available to help your client prove their income, allowing them to expand their portfolio. The most common ways are:
- 80% of rental income: Most lenders used only 80% of the rental income. Some specialty lenders may accept all of your client’s rental income, as long as they don’t rely on negatively geared properties.
- Financial statements: specialty lenders may use your client’s last two years’ worth of tax returns and financial information to show their actual rental income and profit.
- Low doc loans for professional investors: some specialty lenders may allow your client to declare their rent income without providing actual proof.
If your client is a professional investor struggling to secure a loan, Mortgage Street may be able to help. We are a non-bank lender, and our team of brokers will assess your client’s situation to get a complete understanding of their total rental income. Once we consider their situation, we can find them the best loan option to give them the best outcome. Whether your client wants to lower their interest rate or increase their borrowing power, our experts can find them a loan that reflects their needs and financial situation.