When assessing a home loan application, lenders look beyond employment status and salary alone. They may also consider rental income, other sources of income, existing debts, household expenses and the borrower's overall financial position.
Recently, the BSI Brokers lending team helped a single parent working part-time obtain pre-approval for an investment property loan.
Here's how we approached the application.
🏡 The Client's Financial Situation
The client was a single parent raising a child independently, with the following financial circumstances:
- Working part-time and earning employment income.
- Receiving additional government benefit income.
- Owning an existing investment property with rental income.
- Having an existing car loan and other financial commitments.
- Meeting significant private school education expenses for their child.
Although the client had multiple sources of income, their overall borrowing capacity required careful assessment.
💡 What Were the Main Challenges?
There were several factors that needed to be addressed:
- Part-Time Employment
The client was not employed full-time, so we needed to present a clear picture of their income and financial position. - Government Benefit Income
The lender required clarification around how certain WINZ benefit payments could be assessed and whether they could be included in the servicing calculation. - Existing Financial Commitments
Car finance, other debts and private school fees contributed to the client's overall expenses and affected their available income for mortgage repayments. - Rental Income Assessment
The existing investment property's rental income was an important part of the overall financial picture and needed to be assessed appropriately.
🔍 How Did BSI Brokers Approach the Application?
Rather than focusing on employment income alone, we reviewed the client's broader financial circumstances and worked through the lender's questions.
Our approach included:
- Reviewing Rental Income: Assessing the existing rental income and considering the potential rental cash flow relevant to the proposed investment.
- Understanding WINZ Income: Reviewing the relevant benefit information and supporting documents to help explain the income to the lender.
- Assessing Existing Commitments: Taking into account the client's car loan, other liabilities and ongoing household expenses.
- Preparing Supporting Information: Providing additional explanations and documentation to address the lender's questions.
- Working with the Lender: Maintaining communication with the bank and responding to further information requests during the assessment process.
🎉 The Outcome: Investment Property Loan Pre-Approval
Following further discussions and the submission of supporting information, the client successfully obtained investment property loan pre-approval.
This case demonstrates that mortgage applications should be assessed based on the borrower's overall financial circumstances rather than employment status or salary alone.
❤️ A More Complete Approach to Mortgage Advice
Every borrower's financial situation is different. Part-time employment, rental income, government benefits, existing debt and family commitments may all influence how a lender assesses an application.
At BSI Brokers, we take the time to understand the bigger financial picture, identify potential challenges and help clients present their applications clearly to lenders.
Thinking about purchasing an investment property or reviewing your borrowing options?
Talk to the BSI Brokers lending team to discuss your circumstances and explore potential lending options.
Important Information & Disclaimer
This case study is provided for general information and illustrative purposes only. It does not constitute financial advice or a guarantee that another applicant will receive the same outcome.
Lending decisions are made by individual lenders and are subject to their credit policies, serviceability assessments, verification requirements and approval conditions. Income sources, including rental income and government benefits, may be assessed differently by each lender.
Loan pre-approval is not unconditional or final approval. Any lending remains subject to the lender's requirements, satisfactory verification, property assessment and any other applicable conditions.