88/90/95% or even 105% loan? Suggestions for a Novice

Hi,

I am looking to buy first own property and have roughly 100k cash saved, after sale of joint property.
My income from last 18 months has been primarily derived from share portfolio roughly 75k p.a.
75% of which is dividends. My strategy would be buy & hold long term.

What are my possibilities of getting 88/90/95% or even 105% loan?
Should I buy IP or PPOR first?

My rough plan is to buy 3/4 properties over the next 24-36 months, is this possible?

Cheers

 

Slim. It's hard to find lenders who will use share portfolio income. Some will use their deeming rate over the value of your portfolio. Others might use dividends of some of the shares you hold, but usually only the top 20 types of stocks.

If your income has been from the buying and selling of shares most lenders will want to see at least 2 years of this type of income in your tax return, as it's capital gain rather than income.
I'm assuming the deposit on the property is different funds from the share portfolio? I'd suggest 80% is best to aim for as there are different rules and more costs borrowing over 80%.

 

You likely want to minimise non deductible debt and maximise deductible.

Therefore for the PPoR I would be aiming to buy at 80% if possible and dump any extra cash in an OFFSET account.
105% for the IPs - pay down the PPoR non deductible debt (not via offset) and then reborrow all IP expenses.
This is assuming the property prices you are looking at and deposits are available.
If you go IP first I would be looking at keeping as much cash as possible for PPoR purchase (depending on the value you are looking at)

Speak to a broker as they will explain your options for loans, plenty post on this forum.

 

A couple of years ago I was knocked back for a credit card because they would not include substantial share dividends or bank interest as income!
Marg

 

Being reliant on share income will be the main challenge for finance - LVR will require specific advice, as borrowing capacity will be first port of call to assess how much of your income will be able to be accepted.

You say your income is primarily from shares - do you have any other income at all from a PAYG job etc?

Best to talk with an investment focused mortgage broker who can review your situation in depth and give specific advice.

 

Thanks for all the replies.Very insightful.

I left my PAYG job to do some travel, because I had created passive income in shares.

1)If i were to get another PAYG job say 65k p.a. How long before lenders would deem me suitable to borrow?
2)How much of share income would count towards borrowing?For eg. 65k payg + 75kp.a. borrowing power= 140k?

To answer Rolfs question the properties I have been looking at are in 6-700k range. And most of them I could redevelop or reno to manufacture CG or equity.

3)Could you explain what you meant by willing guarantor? Do you mean borrowing against family properties?

Cheers

 

1) some lenders accept the first payslip, others want 12 months in thee job.

2) depends on the lender. 80% of the most recent financial year as shown in your tax return is probably the best case scenario.

3) a guarantor is a family member who has a property they let your bank put part of your mortgage against. It means you don't need a deposit.

 

multiple properties at this price point on 65K PAYG income and 75K dividends, treated at a deemed rate... pretty slim chance Im afraid.

You are better off focusing on less expensive properties

 

What's your approx share portfolio balance?
What was the yield on this portfolio last FY?