Income Assesment for Lending

[Karma]

When I bought my last investment property, my mortgage manager was only able to assess my income on my existing salary, we couldn't take my commission portion into account until I had been at my current position 2 years or more. In that case, he was only able to assess around 2/3 of my income

I have now changed jobs, to a position with a portion of commission again, but with higher earning potential. in this case, my commission makes up 50% of my income.

As I have been in a commission-type role for over two years now, will we be able to use my total income at the new position, or will I have to work in the company for another two years before this can be used?

Can anyone suggest a lender who is able to be more lenient to this? or are there any tricks to get around it?

[Monkeyboy]

Depending on the LVR requirement, you should be able to utilise the Lo-Doc loans that are available. What bank are you dealing with. You should find a good broker to help you through these issues. There are always more ways out there than just your bank. That's why using a good broker can help you past just the one bank system. Remember your mortgage manager only knows what can be achieved at their bank and not other banks.

[krispedersen]

Mike's right.

ANZ and National have good low-doc products that can go up to 85% LVR and are suited for PAYE applicants in your position. Sometimes a lender will have more leniancy on the commission timeframes if you have been working in the same industry but overall if you are trying to get a loan where you need to prove income the lenders require the timeframes to establish consistency of commission received as initially there can be a sales lag

[Scott Miller]

Another point to ask is: Is your new employment similar to your old employment? E.g are you in the same line of work?
If you are then a letter from your employer can often help with establishing you real overall income.
Both Mike and Kris make the point that a mortgage broker will know how to 'package' the best deal for you to the best lender,other than that Lo Doc really is the best option for many circumstances like yours.

[Johnathan Arcus]

Advice

Joined the site today and its great to see that people are willing to share their time and knowledge. With reference to the above the only danger in signing the lo doc products is understanding the fact that life can sometimes throw some unexpected and unfortunate events at you.

I make sure that my clients understand what the lo doc agreement says and that they can afford the repayments. A person who is a top sales person and earns lots of commission is vulnerable to a change of circumstance that could lead to a fall in sales and thus revenue. A person must understand risk and try to minimise it in their particular financial situation.

I find the lenders I deal with very flexible if they can understand my clients industry and payment model.


Johnathan Arcus
Mortgage Specialist
The Terrace Financial Group
P.O. Box 10 755
Wellington

Telephone: (04) 472 3322
Direct Dial: (04) 474 1282
Fax: (04) 499 4226

Mobile: 0275 84 38 34

Member of the New Zealand Mortgage Brokers Association (NZMBA