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Refinancing PPOR when on annual leave

Discussion in 'Property Finance' started by Mitchell, 8th Jul, 2016.

  1. Mitchell

    Mitchell Active Member

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    My wife and I are looking to refinance our PPOR. She has been on maternity leave since October last year and switched over to annual leave (half rate) once the maternity leave ran out.

    When her annual leave runs out we will be back to my wage only plus our savings if needed. She goes back to work in January.

    Would we have any chance of refinancing before she goes back to work?
     
  2. Jess Peletier

    Jess Peletier Mortgage Broker - Australia Wide Business Member

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    If you have a confirmed return to work date, and evidence of savings to make payments in the meantime until she comes back, it can be possible. The closer the return to work date, the easier it is. Will she be returning full time?

    If it services on your income only, no issues at all. :)
     
  3. Terry_w

    Terry_w Solicitor, Finance Broker, CTA Business Member

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    depends on your income and debt levels
     
  4. Mitchell

    Mitchell Active Member

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    Thanks Jess. She won't be returning full time initially - she will ease into a full time role. Our current income should be enough to refinance if we want to keep the same loan amount and not unlock any of the equity .
    We had a broker do an upfront valuation on our house through Westpac early this year and it came in at $900k. We paid $300k for the land and $350k for the construction in 2014. It's our first home and we only had a 10% deposit when we purchased it.

    With that valuation we could potentially unlock some equity, but I'm thinking we may have to increase the household income to show ability to service an increased loan amount.
     
  5. Jess Peletier

    Jess Peletier Mortgage Broker - Australia Wide Business Member

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    Possibly - have you had a broker run your numbers for you yet?

    If you've got a letter or similar stating your wife's hours when she goes back, you may have a shot, especially if you have cash to cover and the shortfall is not very high.
     
  6. tobe

    tobe Well-Known Member

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    And you can borrow said shortfall. Just get a letter that states when she goes back and her part time income and also when she intends to go back to a full time income.

    If there is a shortfall, borrow a little more to cover it. ANZ are the best at this I've found, although all the majors are taking maternity leave 'gaps' into account now.
     
  7. bob shovel

    bob shovel Well-Known Member

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    With these situations, can you refinance based on one income (his in this case ) then after wifey returns to full time work for 3+months refinance again? Assuming servicing works on one wage
    Or is it best to submit everything for wife anyway and get the most out possible at the time? Then go again when back to full time
     
  8. Jamie Moore

    Jamie Moore MORTGAGE BROKER - AUSTRALIA WIDE Business Member

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    If you've got savings to cover the shortfall of income whilst on mat leave you should be fine - particularly with most of the major banks. A letter from your wife's employer declaring her return to work date and income upon return will be required.

    Cheers

    Jamie