Not sure why seeing a broker is important? This scenario will explore an applicant who receives Bonus Income and how going with one bank over another can massively increase borrowing power.
Tristan is looking at purchasing an Owner Occupied property and would like to maximise his borrowing power as he is a single applicant.
Tristan has been with the same employer for 5 years and receives an annual income of $120,000 p.a. but also receives bonus income based on his performance. In the last 2 years he has received the following bonus’:
2024 - $60,000
2023 - $10,000
In the 2023 year Tristan took some time off for health issues which impacted his ability to earn a high bonus.
Scenario 1 - Bank A (average of last 2 years)
If Tristan were to walk straight into his bank and request his borrowing power, let's assume they assess his bonus income as the average of the last two years. This comes out to $35,000 ($60,000 + $10,000 / 2).
Therefore, his maximum borrowing would be an approx. $690,000 loan
(this is not property price but rather loan).
Assuming: Tristan is debt-free, has moderate expenses and no additional expenses
Scenario 2 - Bank B (most recent year in isolation)
Tristan comes to see a Mortgage Broker and gets given the advice to go with Bank B who has a most recent year in isolation bonus policy. What this means is the bonus income of $60,000 in the most recent year can be used.
Therefore, his maximum borrowing would be an approx.
$800,000 loan (this is not property price but rather loan)
Assuming: Tristan is debt-free, has moderate expenses and no additional expenses
In summary, by consulting a mortgage broker and choosing a bank with a more comprehensive policy, Tristan was able to add an additional $25,000 in bonus income to his application. This resulted in a significant increase in his borrowing power by $110,000.
This a huge increase, especially taking into account how competitive the market current is.
If you’ve been directly into the bank to determine your borrowing power, reach out today:
📱0401 225 713
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