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Why calculating your income for a home loan isn’t as simple as it seems

Why calculating your income for a home loan isn’t as simple as it seems

It probably comes as no surprise to hear that your income is one of the most important factors when applying for a home loan. So how much do you earn? This might seem like a simple question. But when it comes to home loans, nothing is simple. This is especially true when working out your income.

But I know how much I earn

You may know how much you earn, but you probably don’t know how lenders will calculate how much you earn. This is because lenders use a lot of complex rules to work out income.

For example – you may rightly consider your superannuation as part of your hard earned income. But lenders actually exclude your super from your income.

Bonuses and special allowances, such as car  allowances, may also not be counted as part of your income. Or they may only take a certain percentage of these.

It can become even more complex if your pay changes. You might receive a promotion, or change roles. Lender rules in these situations can be especially tricky. In some situations, only a certain percentage of your pay may be counted.

Not even lenders agree amongst each other on calculating income

As if all these rules don’t make things complicated enough, every lender does things differently. Lenders have varying rules about which parts of your pay count towards your income in a home loan application. Some lenders are fairly flexible and generous, whereas others can be quite strict.

This means that one lender may consider your earnings to be higher than another. It also means that the lender most suitable for one person, might not be right for someone else.

All these factors can have a huge impact on your borrowing capacity. So how do you work out your income, or decide which lender is best for you?

Bee Finance Savvy makes it simple

At Bee Finance Savvy, we know that this can all seem rather confusing to most people. But it’s our job to make sense of it all. We keep up to date on lender rules regarding income. We’re also very experienced in examining pay slips and tax returns to determine how various lenders will calculate our clients income.

This allows us to work out exactly how much your income is, according to the lenders. It also means we’ll know which lenders will suit you and your income best.

If you’d like a complimentary assessment of your income and borrowing capacity, give our savvy broker Desiree a call, or send her a text on on 0455 131 937 or 1300 140 554. Desiree can also be reached at enquiries@beefinancesavvy.com.au .

To see what some of our customers have to say about our services, check out our WOMO reviews https://www.wordofmouth.com.au/reviews/bee-finance-savvy-miranda

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