Advice on getting a loan

Hi all,

I am hoping to build my first house in 12 months time. I plan to have savings of 15k plus FHOG of 20k, giving me a 35k deposit. I am looking at spending 330-350k so will need a loan of 300-320k.

My income is currently 50k. My question is, will i be able to get a loan of 320k from this income?
I have student loans of 40k but no other debt.

I have a 2nd job working for a family member which gets me roughly 10k a year but this is cash in hand so I assume that the bank wont take this into account. However I am willing to get another casual job on top of this earning roughly 10k a year. How would the bank assess this casual job??

When i build the house, my brother will be living with me and paying rent. Will the bank take this into account?

If needed I can get my dad to guarantor the loan but would this help if the bank finds my income to be too low?

Are there any other options? Any tips and advice are appreciated. Thanks.

 

Hi Jett

Running some quick numbers without being armed with all of your information and on paper it would appear to service.

Just remember when your income hits the required level for repayments to be taken out to cover your HELP debt this will reduce your borrowing capacity.

In regards to a cash in hand position if this income is not declared on your Tax Return then it will not be considered for servicing.

Casual income is ok but with most lenders you are going to need to have held this position for > 6 months.

Of course refer to my point above in relation to added income and your HELP repayments.

12 months away is a long time in the current lending climate so make sure your broker factors this in when choosing a lender to recommend.

Regards

 

A couple of things:

* Formalise the second job. Cash can't be proven so it can't be used in affordability calculations. Get payslips, declare it in your tax return. It means you'll have to pay tax, but you'll also improve your options.

* Save more money. You've got a bare bones deposit and it probably is achievable but limits your options. Larger deposits means a wider range of lenders, lower costs and lower interest rates.

* You can't use your brothers rental income to qualify for a loan when it will be your first home. From the banks perspective it's either owner occupied or it's an investment. You can certain get rent from him but the banks won't recognise it.

* Your Dad can help with deposit or a 'family guarantee', but they can't improve your borrowing capacity.

 

Potentially but would need to know the outgoings such as living expenses, HELP debt monthly repayments and any other debts.

Basically its money in v money out and whats left to service debt at between 7-8% P&I repayments will determine borrowing capacity and does still vary from bank to bank depending on your individual circumstances?

Any income that cant be declared "on paper" and you dont pay tax on will not be accepted, although it will assist cash flow

No except for one WA based lender that will accept a history of board going into a bank account for a set period, likely min 6-12 months.

No, because you will still have to demonstrate you can still service the full debt.

See a broker to get a preliminary assessment done so you know where you stand and proceed from there.

 

Thanks for the advice.
I have the opportunity to make the 2nd job formal.
It would equal 15k a year gross but it is as a contractor.
Does been a contractor effect how much of the income the banks take into consideration when assessing my borrowing power?

Thank you

 

Can get away with 1 year financials with a few banks such as CBA, Westpac and St George.

 

Thanks, so if I started early next year and it was on my tax return for 17/18 would that be good enough to get a loan by the end of next year?

 

15k wont get you any funds once you take living expenses into account. If its supplementry to other income then it will improve your overall borrowing capacity.

 

Yes i have a full time job earning $47.5k a year and this will increase in a years time. Thanks for the quick response.

 

I dont have an ABN yet.
Will set it up early next year.

 

Would I be better off getting a casual job if i want to get the loan in 1 years time?

 

Self employed needs a longer ABN history - at least 2 years with most.
Casual - 12 months will do the trick with most lenders, some are happy with 3.