Allowances Credited to your Home Loans
Depending on the type of job that one does, the base salary may only form a part of the actual income of every person. Aside from this there may be other benefits such as overtime income, and various types of allowances such as travel allowance, fuel allowance, meal allowances and accommodation.
With all these additional benefits, there may actually be a large disparity from the actual income that you earn, and the income that you receive. Hence, when applying for a loan, it would be better to have these allowances included as your regular income. If included, the amount of your total loan may increase significantly, and the number of properties you can choose from likewise increases.
The problem is that these allowances may not be recognised by some banks or lenders. This means that they simply rely on the salary indicated in the regular income you receive in your payslips, and if this is done, it may play a big factor in the amount of the loan you can apply for.
Banks and lenders are like this because they would want to reduce their risk. Hence, they only include the income that you regularly receive in considering your loan. This means that these allowances are seen as mere irregular items that may or may not be received within a certain time frame. This can be remedied by proving that you indeed receive these allowances regularly as it is part of your job description. For example, your job requires you to constantly work in the field, and you are seldom at your desk. Your company grants you travel allowances and your own vehicle for your field work. Due to the fact that your field work is regular then banks and lenders can consider your travel allowance as part of your regular income.
Unfortunately, there are only a handful of banks and lenders out there who are willing to recognise this type of additional income. It would take quite awhile for an individual to find out which particular banks and lenders these are. A good plan would be to contact and ask advice from the experts on home loans. They can lead you directly to the banks and lenders who often accept these allowances as part of your regular income, thus enhancing your chances of getting a better loan that is proportional to the income that you receive. Look to these experts for tips on home loans on allowances.
Is it better to buy a house or to rent one?
It is usually more ideal to buy a home rather than to rent one out, however it usually takes a few years for buying to become a better deal than renting. This is because when you purchase a home there are some big upfront costs involved such as stamp duty, which you need to be prepared to pay. However when you own your own home, you build up equity on your property once you make repayments on your loan.
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