Hello Everyone,
I have a situation that I am sure a few of you can give me some professional advice on.
Ok, Myself and my partner are looking to buy our PPOR on the Central Coast of NSW, anywhere from now till June next year.
We are having a dilemma about what to do about finance. We have saved about $12,000 and are now saving $1900 a month together. We earn together $80,000 (gross) a year and have monthly repays of about $800/month.
What I am hoping some of the Forums Mortgage Broking friends can help with is this.
I am being made redundant anywhere from October till January. So my gross income of (45k) goes but so does $400 worth of MOnthly repays. Also I should get about $15,000.I want to know what potential outcomes and Hiccups could arise. With me starting a new job and Applying for a Loan or applying while awaiting for redundancy?
Can anyone give me some direction??
Teylu (AKA Alex Marshall
Cheers,
Teylu“Has anything you’ve done, made your life Better?”
(American History X)Hi Alex,
I’m a bit confused – what are you paying $800 of Monthly Repays towards that will stop when you leave work?
Generally, the less income you have the harder it can be towards a new loan, however if you do start a new permanent job before applying for your loan next year in a similar profession with no probation period and minimal break then most lenders won’t be too fussed. If you are uncertain about new employment I’d hesitate to rush into debt unless your partner can cover all your living expenses.
Hope this helps.
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Mel
[email protected]Mel,
My redundancy is about 22k I am going to oay off my car and interest free finance when I get it.
That is what I meant. Sorry about that. I wish I read these books earlier, but in the flip side I know better now so the bad habits have stopped.
I am pretty pee’d that I am stuck in a PC lease that is going to end up costing me a fortune.
Hopefully with my next Career move (Real Estate) I can claim alot of it on tax.
Cheers,
Teylu“Has anything you’ve done, made your life Better?”
(American History X)Alex,
There is no getting around the fact that it will be harder.
You could buy now on both incomes but you need to be sorted before that redudancy comes around or you will be caught with a contract and no finance.
Applying later will mean only on your partners salary of $35 000. Your real estate income can be taken into consideration by some lenders. Others won’t even consider it until the 12 month anniversary – worst case.
Depends too if the loan needs to go to LMI.
What will the PPOR cost?
Cheers,
Simon Macks
Mortgage Hunter
[email protected]
0425 228 985Comments may not be relevant to individual circumstances. If you intend making any investment, financial or taxation decision you should consult a professional adviser.
Simon,
Thanks for that.
We estimate to between (250k-315k Max). I only started to realise lately that the Redundancy maybe a blessing in disguise as a once off lump sum. But for cashflow it’s a bastard.
We figured we would have to pay LMI. Also we are eligible for FHOG.
I didn’t realise the circumstances about Real Estate for income. I am gathering that is due to the inconsistency of income.
Any advice is helpful.
Thanks for everyone’s help so far.
Cheers,
Teylu“Has anything you’ve done, made your life Better?”
(American History X)Hi Alex,
If you have approx $20K in spare savings to put towards a deposit, leaving about $9K for costs and contingencies, then a $250K loan looks like this:
Deposit – $20K = 8%
Loan – $230K
Repayments I/O at 6% = $13,800pa = $1,150/mth
Repayments P&I at 6% = $16,550pa = $1,380/mthThis is a big ask on a single $35K income and hence without your job most lenders will be very hesitant to take on this loan. As I said above continuity of employment is a good thing, or as Simon suggests get the loan now but be warned that as a PPOR with no rental income it’ll be a BIG stretch on your partners income alone.
Hope this provides an idea of the hurdles you face – never give up though, on both of your incomes it’s very achievable.
Good luck!
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Mel
[email protected]Thanks Mel,
I am very determine to get employment ASAP after the Redundancy.
A question though, if we apply for a Loan, what happens if they ring my work for confirmation of employment and they then find out I am awaiting a Redundancy will this effect a loan application??
Cheers
AlexCheers,
Teylu“Has anything you’ve done, made your life Better?”
(American History X)Alex,
Paying the LMI is one thing – it is getting it approved by the Mortgage Insurers that makes it hard.
Most people are unaware that most deals rejected by banks are because the Mortgage Insurers reject them.
Will you be on a retainer with the real estate job? This can be included but usually only after you become permanent. I am afraid you are entering an industry reknown for high staff turnover.
There are lenders who can approve 90% LVR without needing to refer back to the Mortgage Insurers. In this case you might be better off holding onto your lump sum and saving as hard as possible so we can try for a 90% lend.
Just some ideas to get you thinking.
Cheers,
Simon Macks
Mortgage Hunter
[email protected]
0425 228 985Comments may not be relevant to individual circumstances. If you intend making any investment, financial or taxation decision you should consult a professional adviser.
Yep, they’ll can it AND won’t help you getting a loan with the same lender the next time. Luckily there are lots & lots of lenders.
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Mel
[email protected]Thanks Mel and Simon,
I am in the Process of going through Recruitment for LJ Hooker and Jenman. LJ has Retainer, Jenman pays a salary. Your comments have helped alot in regard to what is best for me and my partner.
It is starting to sound alot harder than I first thought, but it won’t stun my enthusiasum.
I guess I’ll just have to knickle down.
Maybe buy ASAP (Lend Deposit from our Parents) and get a renter in and don’t move in till after the redundancy when I start a new job. (That might work) Go hard on the mortgage till my current job termination and then quickly find a new job and once settled give notice to the tenant.
How does that sound, is that Possible??
Or try for a different career??
Sorry if this is annoying.Cheers,
Teylu“Has anything you’ve done, made your life Better?”
(American History X)If you buy an IP then the loan will be unregulated by the UCCC. That might help.
You can always apply for the FHOG after settlement – it doesn’t need to go through the bank.
I am afraid I can’t really give you any better advice at this point – not enough specifics.
I would be interested if Jenman agency puts you on probation and if so for how long. Once you are off probation you can use both incomes[
]Cheers,
Simon Macks
Mortgage Hunter
[email protected]
0425 228 985Comments may not be relevant to individual circumstances. If you intend making any investment, financial or taxation decision you should consult a professional adviser.
Simon,
Your advice has been great. Unfortunatley I am in a big grey area. The reason being is that my line of Work “Custody for Fund Managers” make when we will be let go up in the air. Our Business has been sold but when things finish up is dictated to by the Clients. So know has any definate answers.
Sorry about having such broad and General comments, but my situation has me in this predicament.
Simon your based in the Hunter right??
I’ll definately be looking to bring my business when the time is right to you.
Thanks for your help.
AlexPS. To an earlier question, will my pending redundancy be a issue for the potential lender if I apply soon for a Loan???
Cheers,
Teylu“Has anything you’ve done, made your life Better?”
(American History X)If the redundancy is real then yes it will. Have you been formally notified of it?
Cheers,
Simon Macks
Mortgage Hunter
[email protected]
0425 228 985Comments may not be relevant to individual circumstances. If you intend making any investment, financial or taxation decision you should consult a professional adviser.
Simon,
Yes we have.
But workloads depends on when people are made redundant. For me it looks like December.
We get 4 weeks notice for when our last day will be.
Cheers,
Teylu“Has anything you’ve done, made your life Better?”
(American History X)Teylu
I live on the Central Coast and will be selling shortly. Wanna buy a house possibly with extended settlement?
If you want I can email you details.
Nu Gen
Nu Gen,
Sounds like a nice Idea.
But my probs at the moment is the Finance side.
Thanks for the offer.
Out of Curiousity where is you house at??
Cheers,
Teylu“Has anything you’ve done, made your life Better?”
(American History X)Teylu
Have you tried getting work on c/c you mentioned Jenman they to be always advertising, there is proccess work or security but then It depend on your background]
aanroYeah the idea for me is to get work on the Coast.
Really had enough of travelling at least 3 1/2 hours a day to and from work, especailly to a job I don’t want to pursue any further as a career.
I know that Geoff Ward at Wyoming is a Jenman Realty.
That is the plan, fingers crossed that all goes to plan.
Cheers,
Teylu“Has anything you’ve done, made your life Better?”
(American History X)
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