Hi All,
Starting to get a little frustrated now after speaking to several of the big banks. In short the numbers are the following…
$600k purchase price with $400k deposit and savings.
Ideally I'd like to structure with 20% down $120k – borrow 80% and keep the remaining $280k in an interest offset account.
In reality borrow, $200k @ approx 5.5% = 11k p.a
We can rent out a main ensuite room for $300 p.w which should cover the interest and ongoing costs.
Therefore temporarily we will need to dip into the offset out for living expenses until both my wife and I get back on our feet
My question is
1) are there any lenders who can see past this temporary set back as we are young professionals?
2) what can people do if they find themselves with a mortgage in our position? There is income protection insurance which is apparently all the rage atm
3) apologies for my lack of knowledge, but how long before the banks start knocking on the doors for a repo even though you've got over 60% equity?
4) I know what I want from my bank currently is similar to a reverse mortgage, but we don't own the place 100% yet
regards,
Tommy
Hiya Tommy
It's a frustrating situation.
There's a couple of main things lenders look for – a deposit and the ability to service the liability.
You've got the deposit sorted – but being unemployed (presumably with no income coming in) then you're unable to demonstrate the ability to meet the liability.
When you're back in the workforce, it will be a different story.
Cheers
Jamie
Jamie Moore | Pass Go Home Loans Pty Ltd
http://www.passgo.com.au
Email Me | Phone MeMortgage Broker assisting clients Australia wide Email: [email protected]
tkasing wrote:Hi All,Ideally I'd like to structure with 20% down $120k – borrow 80% and keep the remaining $280k in an interest offset account.
In reality borrow, $200k @ approx 5.5% = 11k p.a
Tommy
Lenders work their serviceability based on 2% higher then the current rate; incase the interest rate changes.
tkasing wrote:We can rent out a main ensuite room for $300 p.w which should cover the interest and ongoing costs.
Sub-renting can not be included into serviceability as it's not considered stable.
tkasing wrote:1) are there any lenders who can see past this temporary set back as we are young professionals?
2) what can people do if they find themselves with a mortgage in our position? There is income protection insurance which is apparently all the rage atm
3) apologies for my lack of knowledge, but how long before the banks start knocking on the doors for a repo even though you've got over 60% equity?
4) I know what I want from my bank currently is similar to a reverse mortgage, but we don't own the place 100% yet
1. Unfortunately with no real income coming in to service a debt, the answer is no.
2. Im guessing your talking abt income protection? well this only works if your working and lose your job because of some injury or unexpected event..Lenders also can't use this as "serviceability" as it's also not reliable.
3. They will start chasing you up once you miss your 1st payment…equity doesn't mean anything…equity doesn't;t pay the loan/interest- they need to sell to access the equity.
4. Not sure what your asking here…
Once you get a full time permanent job, even for 1 day; it's possible to get the home loan even on probation, as long as the other financial factors within the loan matches up.
Mick C | Shape Home Loans
http://www.shapehomeloans.com.au/
Email Me | Phone MeSame Banks. Better Rates. Served With a Passion.
easy solution, go get a job, doesn't have to be the best job in the word you don't even have to like it, it doesn't even have to pay that well, you don't have to work there forever, just quit after you have your loan approved.
Or tell them you are going to rent the entire property out. Or go to a different smaller lender that will lend based on equity position and not serviceability. Ie a hard money lender.
Once you get a job, then refinance your equity out with a mainstream lender.
and in reality your not borrowing 200k even if you have money in your offset account. Your borrowing 480k. and the repayments will be calulated on that.
Hi Wilko
Hate to say since the inception of the NCCP legislation if it is a coded loan it wont make any difference if you go to a big or smaller lender every lender is going to want to see suitable serviceability.
Couple of private lenders we deal with take unemployment benefits as serviceabilty but the rates are ugly.
Cheers
Yours in Finance
Richard Taylor | Australia's leading private lender
You must be logged in to reply to this topic. If you don't have an account, you can register here.
