(upbeat music)
- Hi, I'm Connie from Prosperity Finance,
sharing the best financial tips
so that you can be more successful
with achieving your financial goals.
Recently, I had a client ask me,
"How come this many people have
own so many properties while I can't borrow more
to buy more rental properties?"
Well the biggest change over
the last couple years is the bank policy.
Now bank has tighter policy so that
you can't borrow as much as before.
In fact, you can only borrow only a fraction
of what you can used to borrow.
In that example I just mentioned,
if you borrow two years earlier,
you probably can borrow up to
five or even six million.
Whereas now, he can only borrow up to two million.
With the same situation same income household.
Everything the same.
What's difference is a bank policy.
And also in the past, obviously,
property are cheaper by now.
So with more
borrowing power and access to cheaper houses,
no wonder you know
some people can use to own
more than ten properties,
whereas now once you purchase couple properties
you probably reached the glass ceiling.
Today I have really good news for you.
If you are thinking
you know how can I actually borrow more
and buy more property
I know property market is flat
but I know its a longterm gain.
So I saw
and buy more
I'm still kinda building my property portfolio.
I'm still getting close to my financial goals.
So, yes.
So definitely we have some really good news for you.
So please
stay with us.
I think the best way to demonstrate this
is to show you example.
So let's firstly I share with you a file.
OK, so in this case
I have to hide the name of the clients
for confidential reason.
But the background of this client is that
let's say they are Mike and Mary.
Now Mike and Mary are married couple.
They have two kids.
They are quite successful in terms of
their corporate jobs.
They are making together
about 180K a year
gross income.
And on top of that they own two rental properties.
And they have a family home.
Now the current lending
is around 1.7 million dollars.
Now they are looking to
purchase a property and want to borrow about 400K.
They went to their bank ANZ
and unfortunately they got a decline.
However, the good news is that
when they come to me
we not only help them secure the lending
what they need,
but also make them aware they can
actually buy more
cause they can borrow more.
That's why I want to show you this secret
cause you might have the same issue
and we'll probably have a solution as well.
So let's have a look.
So for this clients lets
have a look
what's the different borrowing capacity from each banks?
So ANZ can approve
up to 320K.
But client asked for 400 so that's why they decline.
Yes they're both similar 350K,
BNZ
330K,
WestPac
720K.
So it looks like
double the other banks.
But look at the other two.
One was Bank of China.
They can approve up to
1.1 million
and another lender called Select
they can approve even more.
Now if you compare the highest,
which is 1.17 million,
and ANZ for example 320K,
it's almost four times.
So it's huge difference.
The reason they have such a big difference,
is because how the bank calculates
existing home loan repayments.
And also how they treat the
minimum living expenses.
So let's have a look at each of them.
You may wonder what do you mean by
existing home loan repayments.
You know I'm actually paying the same
amount every month.
And the
I can even
get my rent covered
the mortgages.
So how come I don't have a borrowing capacity?
Well that's not how the banks see it.
When the bank calcuate your buying capacity
firstly they will actually look at your
current payments.
So your current home loan they need to work
at a really high interest rate
to sensitize your borrowing capacity.
So even though you are paying 7 grand a month,
for the home loan
but in reality if you look at
ASB, ANZ, BNZ
they actually allocate 12K
for your home loan repayments.
So 5K more than your actual payments.
Whereas the Bank of China and the Select
they only allocate nine thousand six hundred
eighty five dollars.
The other one is 10K.
OK so it's much less than the other
Australian banks.
Have a look the living expenses as well.
Now in the past,
the bank
workout the living expense
based on your family structure.
I.e. how many adults, how many cars,
how many kids you have, and then
they will have a minimum living expense
allocate to you.
Obviously if you spend more than that
then what is yours,
but if you spend under that
it's yours its theirs.
So the number here I adjust the minimum.
So I haven't taken to account customer
declaration for the living expenses.
To be honest in this case they spent
around two thousand a month.
So much less than the adminster bank minimum.
But if you look at the West Pack for example
and even Bank of China,
it's only eighteen hundred.
Which is almost
a half of
what is in living expenses.
No wonder Bank of China has more
surplus to support the new loan.
So these two actually cause the biggest difference.
So Bank of China and Select
are the solutions for other people.
You probably can't get any
approval on top of your existing loan,
whereas with these two lenders
you can actually borrow much much more.
You probably with that kind of amount ready
assume you have enough equity,
you probably can buy two more
rental properties.
So it's definitely doable.
Now Bank of China a lot of people
are aware of that bank.
But only up to now they start focusing on
local market.
In the past they purely
welcome the oversince income,
so Bank of China actually
really aggressive at the moment
how they policy are set
and even the rates are so attractive.
They are even more like more attractive
than a mainstream bank.
For example if you see
like 3.89 or 3.85 for one year
they're doing
3.7
nine for example.
So much much better than the mainstream banks.
Select on the other hand
have a similar buying power.
The beauty about these products
is that they can take into account
other income whereas mainstream bank
don't take into account.
For example, like a bonus
over time income or
if you have
a family tax credit,
those work incomes benefits.
They take into account all of them,
whereas other banks won't.
So that might be a game changer for you.
So Select is really good at taking into account
a lot of other incomes.
Also Select is really
friendly in terms of credits comeback.
If you unfortunately have a default on your accounts,
maybe your past bill
or your
bank statements have some unarranged overdrafts etc.
They don't care.
They're really friendly.
And they don't really take into account.
So here we got a decline from a bank
because of account comebacks or defaults
whereas Select actually they're happy to lend you money.
So yeah
so both are really good.
Depends on the situation.
Select is more pricey than Bank of China.
But also still very affordable.
If you can fit the main bank
and still go to the main bank
and we're happy to help you
get the main bank deal.
But if it doesn't fit then we'll
look at the Bank of China or Select.
And it's more about solution
as opposed to rates,
whereas Bank of China actually quite good,
they have the
the best of both world.
The pricing and the solution.
So very very good.
So if you are struggle,
you know getting a loan from the bank
or not enough for you to buy another property,
hey come talk to use cause we do have
a solution for you.
Don't miss out the opportunity of growing your wealth.
If your really like this content
please feel free to subscribe on
YouTube channel and we'll
keep you posted
for any latest news or policies or product like this.
OK thank you so much for watching.
I'll see you next time.
Bye for now.
(upbeat music)