If you are a police officer looking for a home or investment property loan, then some lenders may be more suitable for you than others, particularly those that will factor all regular overtime payments into your income.
Arranging loans for police officers is one of our specialist services at Wilson Pateras. Read to find out what you need to know about police officer loans, including answers to FAQs.
Most lenders will only accept up to 80% of your overtime income when assessing your loan application. This can affect your borrowing power. However, some lenders in the market will consider 100% of regular overtime income.
Either way, it is important to show that any overtime income you receive is regular over a 1-2 year period. Ways that you can demonstrate this are via your most recent tax returns and/or a letter from your employer.
Salary packaging benefits
Some lenders will consider any salary packaging benefits that you may receive to be part of your income, while most will not.
If you do receive salary packaging benefits (such as a novated lease vehicle, clothing allowances or you make voluntary extra super contributions), then finding a lender who will consider those benefits when assessing your loan application can improve your borrowing power.
Second job income
If you work a second job to supplement your police officer income, then some lenders will accept all of this income when assessing your application, while others will not. If they do not, it affects your borrowing power.
If you do have income from a second job, it is therefore important to find a lender who will include this income as part of their assessment of your ability to make loan repayments. When you do, it is also important to demonstrate that this income is regular and ongoing. Once again, a letter from your employer or your most recent tax returns are the best ways to prove additional income.
How much deposit do you need?
Again, this varies by lender. Most banks will require to have a deposit of at least 20% to avoid paying lenders’ mortgage insurance (LMI).
It is important to avoid or minimise the need for LMI if you can. If you cannot, then the cost of LMI varies depending on how much deposit you can provide and how much you want to borrow, but it can add $15,000 or $20,000 to the cost of an average home loan.
If you want to borrow more than 80% of the value of your home, then it will be important to have a good credit score to be eligible for the lowest interest rates.
Should I take out a fixed or variable rate loan?
There is no right or wrong answer to this question. It depends on your personal financial circumstances, as well as both current and future market interest rates. It is best to get professional advice based on your situation.
The bottom line
As you can see, finding the right lender is the key to both maximising your borrowing power and minimising your borrowing costs as a police officer. That is where our experienced lending team at Wilson Pateras can help. Please contact Brett on 0409 402 086.
This content has been prepared by Wilson Pateras to further our commitment to proactive services and advice for our clients, by providing current information and events. Any advice is of a general nature only and does not take into account your personal objectives or financial situation. Before making any decision, you should consider your particular circumstances and whether the information is suitable to your needs including by seeking professional advice. You should also read any relevant disclosure documents. Whilst every effort has been made to verify the accuracy of this information, Wilson Pateras, its officers, employees and agents disclaim all liability, to the extent permissible by law, for any error, inaccuracy in, or omission from, the information contained above including any loss or damage suffered by any person directly or indirectly through relying on this information. Liability limited by a scheme approved under Professional Standards Legislation