Hi, is there any possible way to obtain finance for a property without having any current income? I am looking for a property around the $200000 mark. I have $50000 deposit as well as being elligible for first home owners grant. I currently am a uni student and am wanting to buy an investment property. I went to the bank today and they wouldn't lend me anything. My parents are happy to pay the mortgage for me whilst I am looking for a job. Is there any way I could get someone to lend?
Kind regards,
EddieIt may be a shade difficult Eddie.
1) financier wants to you that you have the capacity to pay the mortgage – will the rent cover the mortgage, insurance & other outgoings?
2) Without other income, you would most likely need your parents to go guarantors (thus putting their assets on the line if you default)
3) Where are you living (at home/share house/elsewhere)?
4)What are your costs at present (budget – rent, food, entertainment, study costs, clothing, entertainment etc)
5) FHBG applies to properties which you are going to live in for 6 months, how are you going to prove to the bank that you will be able to afford to pay once you move into the property if you don't have a job, aren't getting any rent and have outgoings to pay?Thanks for the reply Scott. Yes, I think you are right, I am going to find it very difficult convincing anyone to lend me anything.
In terms of feasibility; The property I have been looking at is rented until December and the rent covers the mortgage and maintainance costs plus a little bit more (ie is positively geared with my substantial deposit). I was planning on getting full time work at the end of this year when I finish my uni degree and was also planning to get part time work in the mean time. My parents are happy to go guarantor and also to help me pay the mortgage if I somehow get into a situation where I can't pay it.
But I think you are right, noone is going to lend to me if I don't currently have an income.
Eddie, you might also consider a part-time job (in your field if possible/depending upon your study load) to show the bank that you do have some income and a good savings record when working.
I am having the same problem , Came out of University and found no one will employ me – Now currently not looking for a job until at least the start of 2010. House Dad – Wife works. But income not enough to borrow more than $70,000
I have $180,000 in equity but no regular (Just Over Broke) income
I have rental income and could produce income from the share market using covered call option selling but the bank told me they do not include share market income into their calculations. What is annoying for me is I do not have a mortgage expense or a rental expense but the bank doesn't factor this into their calculations they rely use a computer program that is inflexible.I am currently borrowing less and investing it in the share market as the share market lets me buy in smaller parcels than investment property , I can invest as little as $500 for each share. (However I know what I am doing with the share market – not for novices as higher risk profile)
Hi Eddie
If the lvr was 60% or below there are a couple of options.
All boils down to the Banks risk i guess. At that level they believe you will loose and they will win.
Richard Taylor | Australia's leading private lender
Duplicate post
Richard Taylor | Australia's leading private lender
duckster wrote:I am having the same problem , ….could produce income from the share market using covered call option selling but the bank told me they do not include share market income into their calculations.Their lending criteria may have changed but it used to be that if you could show good steady income from share trading or option premium they would take it into account – but you had to have a 2 year history of it.
In a nutshell that is still the case:
If you have steady income from share trading or option premium they would take it into account – but you had to have a 2 year history of it.
2 Years Tax returns and would be acceptable.
Richard Taylor | Australia's leading private lender
Thanks for that. I don't have a steady two year income stream yet had to sell most of my shares to avoid the market collapse. Also the private business I am running has not made huge income yet ,but that's cause I am running it part time as well as being house dad.
My two kids start school next year !
Who knows might be able to spend time trying to get a JOB or trading in options.Well you can certainly make a living trading in options it if you have sufficient capital.
Richard Taylor | Australia's leading private lender
duckster wrote:Thanks for that. I don't have a steady two year income stream yet had to sell most of my shares to avoid the market collapse. Also the private business I am running has not made huge income yet ,but that's cause I am running it part time as well as being house dad.My two kids start school next year !
Who knows might be able to spend time trying to get a JOB or trading in options.Chin up Duckster – there are people WITH jobs getting knocked back for loans at the moment that would have been no brainers 12 mths ago. Enjoy the little tykes while they are young. And good on you for selling out the shares before they dropped too much. I lost what must be a 10% deposit on a $250k house worth of shares with the market and many companies going bum up on the asx – which was money I had saved for years. Next year will be different (better) (for everyone that is not a first home buyer anyway) so keep chipping away and enjoy yourself while you are at it!
Cheers
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