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Finance with no job

Discussion in 'Property Finance' started by Ramos023, 4th Aug, 2015.

  1. Ramos023

    Ramos023 Active Member

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    Hurstville
    Just curious to the repercussions down the track! I was approved to go on IP4 but when I applied for finance I had a job. He said this approval was valid for 6 months, since then I have quit my job and haven't found a new one and also found a property deemed viable for purchase.

    My question. Repercussions of 'lying' and going ahead with the purchase and placing a deposit. What would happen come time to settle, would the bank see I lied as I haven't been depositing pay slips and refuse to loan me. Potentially losing a deposit?

    Clearly, I should update my status with the bank but they'll knock back my approval and I can service this new purchase with rentals. Also taking the chance ill be employed by the end of year....

    Hope this makes sense
     
  2. Steven Ryan

    Steven Ryan Mortgage Broker Business Plus Member

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    Don't.
     
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  3. Shahin_Afarin

    Shahin_Afarin Residential and Commercial Broker Business Member

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    You will need to provide updated payslips when you find the property anyway.

    Also note that depending on the LVR - the lender may not accept the time you have been in the current role so talk to your broker and banker ASAP about this change.
     
  4. Ramos023

    Ramos023 Active Member

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    Simply put.... thanks. I know that's what im supposed to do! I just found a good deal through a friend looking to upgrade so I was gonna do a sneaky ;)

    Thanks Shahin. I didn't know updated slips and status was required...makes sense though. My LVR $350k on $1.1m ish roughly so that was always in my favour.
     
  5. Peter_Tersteeg

    Peter_Tersteeg Finance broker and strategist Business Member

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    Your pre-approval isn't really good for 6 months. You may not be required to provide more payslips within 3 months of it being granted, but after that they'll want more payslips. At that point thinks will fall to pieces and you won't get the finance (and that bank will never deal with you again).

    You may be able to service the loan based on the rental, but can you also afford to live on top of that? Rates are rising next week, what happens if they increase again? Can you afford to pay your council rates, body corporate, maintenance, etc..

    Perhaps it would be unwise to buy a property until you're employed again. I wouldn't tell the bank you're unemployed at this point as this may affect future applications, but wait until you're in the new job and give them the update when you're looking for a property under those circumstances.

    Keep in mind that good deals do come along every day if you're able to spot them.
     
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  6. Ramos023

    Ramos023 Active Member

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    Thanks Peter, it is definitely unwise I just thought good chance I'd have a job by then and no harm done!
    Perhaps the Austin Powers 'I like to live dangerously" doesn't apply here haha!

    I like your idea about waiting till I land a new job to update my circumstances than tell them otherwise. Thanks
     
  7. bonanzawealth

    bonanzawealth Well-Known Member

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    What if... Someone win big loterry, got excited, handed over resignation straight away and quit their job, can they get a loan? Maybe low LVR so it's CF+?
     
  8. Shahin_Afarin

    Shahin_Afarin Residential and Commercial Broker Business Member

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    The lender has the duty of care to ensure that you can afford to repay the loan based on your income. So having no income isn't going to get you far.

    Re CF+ properties - the property has been grossing around 10% for it to be considered break even from a lenders perspective.
     
  9. bonanzawealth

    bonanzawealth Well-Known Member

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    If... The guy who wins lottery never wants to go back to work force and never had IP before winning the lottery, then he just want live from rental income and purchase 10 IPs CF+ with 50% LVR each while still keeping $1m liquid cash as emergency; will the bank still lend to him?
     
  10. The Y-man

    The Y-man Moderator Staff Member

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    Buy the properties first, then go around mortgaging them.

    The Y-man
     
  11. Peter_Tersteeg

    Peter_Tersteeg Finance broker and strategist Business Member

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    If the rental income is sufficient to cover his property outgoings as well as his living expenses, as assessed under bank policy; yes the bank may lend him more money.

    If the rental income isn't enough to meet the banks policies on all this, then they won't lend more money.