Hi all,
I have been saving for a deposit for my first home which I will eventually turn into an investment later for a while now.
I have 90K now in savings and with my plans and strict savings expect to have 100K after tax in July 2020. I currently study full-time but have a casual engineering job for over a year now which will become full-time after June with a guaranteed starting salary of $65k.
I’m looking to buy a property as soon as possible with a price tag of $420K but I feel to lack income for finance from the banks or pre-approval. I just want to know if my situation now qualifies me to apply for finance as I really want to get on with my goals and purchase the property now.
If I provide my work history payslips, salary guarantee letter or alike to the bank with the expected income, is it possible under todays finance conditions the bank will help? I’ve spoken to a mortgage broker who suggests a 75K salary will do it but that was some months ago and I will fall short with the income required and likely delay my goal for another year.
I’m calling finance brokers or anyone who can help me find a way to make this goal possible now or very soon with suggestions please.
Thank you
Ben.
Ben
Young investor educating myself on property!
A deposit is only one aspect to consider, income is the other main one. As a general rule of thumb you can borrow about 6 to 7 times your annual gross salary.
But watch out if the work is casual as it will be much harder to qualify
Terryw | Structuring Lawyers Pty Ltd / Loan Structuring Pty Ltd
http://www.Structuring.com.au
Email MeLawyer, Mortgage Broker and Tax Advisor (Sydney based but advising Aust wide) http://www.Structuring.com.au
Hi Ben,
Terryw has provided you with a Mortgage Broker’s view of your situation, with a warning or two. Sounds like things will go better after June when you become full-time (but even that might need some minimum period of employment to qualify – I don’t know, as I am not a MB, but check it out ahead of time).
What I’d suggest though is that you use the time between now and then to grow your knowledge of property – educating yourself about the market you want to buy in (go to open homes, talk with RE agents, go to seminars, etc), learn how you might buy at a discount (so your $420 property might only cost you $380?), learn how to evaluate a house’s value – like its position, land value (desirability of location), its likely tenants, any improvements YOU might make after purchase to add value, etc, etc. And that is the tip of the iceberg – there really is so much more…..
In a word – don’t be in a rush to buy something – plan for it, and reduce any risk by educating yourself ahead of a purchase. Read around on here – check out the Training Centre and its numerous articles and other topics. Oh, and welcome aboard, :)
Benny
Hi Terryw thanks for your response. I agree being on a casual role now will make it much harder but my position has been very stable, I have timesheets to prove a decent workload over the year and I can get my boss to provide me with full-time contract letter for July now. Just wondering further if this can improve my chances to apply for finance now or if a solid 3 months history of full time employment is really the only way to go?
Thanks Benny for your response. I will speak to some more MB about ‘minimum period of employment to qualify’. I do feel I have gained descent education, (over 1.5 years now with seminars, books, tours and RE agents) to take some action, I do have a property in mind, price point, I have a good understanding on how to assess cash flow, tax, negotiation, location etc etc but I agree with you that I will continue learning more to refine my plan. My goal is to get in as soon as possible now and I’m trying to just get pass the finance stage. I will look around at other topics on here.
Last question I want to know if there is any other way to prove my strong savings history, clean credit history, employment guarantees, selected property positive cashflow results, potential rental guarantees or personal cashflow outcomes (like personal income minus expenses after including the IP) to a MB or bank to improve my situation for finance?? I cannot get a guarantor, its unlikely my salary will improve from the 65K on graduation.
Thank you, sorry for all the questions, please note I’m not trying to rush, I do feel I’ve done my research and I’m ready to take any action possible. Thanks.
Ben
Young investor educating myself on property!
Hi Ben,
I do feel I’ve done my research and I’m ready to take any action possible.
All good then Ben – I wasn’t sure, so wanted to sound a warning just in case. Good luck with your search for more MB info (I can’t help you with that).
Benny
Thanks Benny, I appreciate your help!
Ben
Young investor educating myself on property!
a casual worker would need 3 to 12 months in the job to be considered. If LMI is involved some lenders won’t consider casual works as the sole borrower.
You might be able to change to part timmme to help qualify for the loan
Terryw | Structuring Lawyers Pty Ltd / Loan Structuring Pty Ltd
http://www.Structuring.com.au
Email MeLawyer, Mortgage Broker and Tax Advisor (Sydney based but advising Aust wide) http://www.Structuring.com.au
Thanks Terryw for your help, I’ll see what I can do. Much appreciated!
Ben
Young investor educating myself on property!
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