When assessing your loan application lenders need to decide how much money they can lend you. They have a number of legal obligations they need to satisfy when they do this. These legal obligations are generally referred to as Responsible Lending obligations.
When evaluating your Borrowing capacity lenders will assess your income, your expenses and your commitments.
You should list here all your income sources. It is important that you complete this section thinking of any future changes in your income, including pay raises, work breaks, investment income changes, rental income (existing or of the property you are going to buy), etc.
Lender’s will not consider all income sources equally. They tend to favour regular salary payments over any other income source and therefore they will make adjustments/reductions to income from other sources. Different lenders might have different considerations and reductions, the following are general adjustments and they should serve as a guide. When completing your future income please consider applying these lender’s adjustments for a more accurate calculation of borrowing capacity.