Hey
My reportable income atm is negligible (might as well be 0)
But i have approx 900k in savings, and a PPOR with equity of 800k.
and only a hecs debt as i am still at uni.
no other debtI will be setting up a company trustee trust to buy my properties under.
everything i read atm mentions lenders lending based on repayments being 30% of your income. (ability to service a mortgage)
So based on my current income, my ability to repay a loan is nothing….So just wondering what sort of loans i might be able to get, and if you know values on what they might lend me that would be good too.
I am planning on buying +ve geared properties, renovating, and in the future developing.
Hate to say the day of the Nodoc loan has been and gone.
With the advent of the new Credit Laws July 1 serviceability is the key and the ability to show that you can repay the loan is parramount.
Evidence however can be varied between lenders.
Some want payslips or Tax Returns. Some will accept BAS, Trading Statements etc or even a Stated Income.
You mention that you have 900K in savings so even at 5% per annum your interest income would be $45,000.
This would be on top of your potential rent.This is not to say that you could show satisfactory income but certainly would be a hard sell still be at uni.
Cheers
Yours in Finance
Richard Taylor | Australia's leading private lender
Pure asset lending is available however even they are starting to change to see an available income source (under responsible lending compliance).
Another, possibly safer option is to buy property for cash, and then use the rental as an income source and then that can help service further loans in the future (along with the rental you would recieve on the new properties), then when you are out of uni and have an income source, you can always take loans out against the property you bought for cashm (although the purpose of funds will determine the deductability).
Might be worth speaking with an accountant / financial advisor regarding these considering your current income though…Lincoln i agree that pure Asset lending is still available but dont think you would find ANY Broker want to take such a deal on without satisfying themselves on serviceability as simply could not sign off on the loan Not being Unsuitable if there was no further checks or balance.
I had a client ring me yesterday from the forum who had been with CBA for 23 Years and has his Relationship Manager tell him earlier that morning that they were pulling his $1.5M Lodoc Line of Credit under NCPP.
They now wanted evidence of income which he was not able to produce being a small developer.$3M in equity and couldn't raise 50% on a LOC basis without some form of income substantiation.
Many investors who thought living on equity was they way forward have come a cropper and as i say to all clients living off rent is a lot better.
Cheers
Yours in Finance
Richard Taylor | Australia's leading private lender
Completely agree, not only is NCCP a new hurdle, but it also falls under what is good conscience in assisting any client with their lending and ability to repay their loans.
That's a very interesting story regarding the CBA Lo Doc loans and something I've heard similar to the USA in the last few years. I'll have to keep in mind for my developer clients – thanks for the heads up! Do you know if there were any other factors to the call-in (such a payment arrears) or was it just based on the income check?
Nope this was purely an lack of provable income.
He was told they were doing a complete review of all of their former lodoc developer clients and he was out on the street.
Cheers
Yours in Finance
Richard Taylor | Australia's leading private lender
hmm ok, sounds not good for me.
I can start generating some income pretty quick if i have to.but does it matter what the income is? would they care if it was stock market profits? or does it have to be a regular job income?
i have thought about buying with equity… but i don’t like not being leveraged, and having all my money tied up in just a few deals.
If you have you own ABN because of your Stock Market trading you would probably qualify immediately for a loan on a limited document basis.
The length of period you have held your ABN will aid the situation as it increases the number of lending options.
If you have held shares with a constant dividend record for 2 years this will also mean this income can be taken into consideration.As far as a regular job is concerned with 3 months employment and that amount of equity you would probably qualify.
Cheers
Yours in Finance
Richard Taylor | Australia's leading private lender
Hi,
If the borrowoer is a compaNy it falls outside of the NCCP regulations. This was specifically included as part of the legislation IMO to allow property developers to be able to borrow money… as almost all smaller developers would not be able to service their peak debt out of their taxable incomes.
So as far as I am concerened if a client is a company the responsible lending laws do not apply…that said I would have no part in accepting a falsly infalted income declaration on a low doc basis.
Marty McDonald | Mortgage Experts
http://mortgageexpertsonline.com.au/
Phone Me
You must be logged in to reply to this topic. If you don't have an account, you can register here.
