Work change impact
Question from Nicole updated on 3rd February 2020:
My partner and I are in our early 30s. We own a couple of properties but still feel relatively new to property investing. We have been working full time and are wanting to reduce our hours and look at doing contract work. This would result in us not having a steady paycheck but being financially better off from contracting plus work-life balance.
We want to know if this is going to negatively impact us going forward? Particularly if we want to borrow more money in the future for more investment properties as the banks will look at us and see that we don’t have a 'steady income' or full-time employment. Any advice would be greatly appreciated.
Our expert Kris Pedersen responded:
Often if you are contracting in the same field as the one you were previously employed in the banks will still take the income into account. Naturally. if your incomes drop this is going to reduce your borrowing capacity. However. it is hard to state the effect without being aware of more of your actual position and also how much of an income drop you are going to have. It would be best for you to see an adviser to assess your position and run it through a lenders servicing calculator to advise further
Kris Pedersen of Kris Pedersen Mortgages is a commentator on property and finance. His team sources top finance strategies. www.krispedersen.co.nz