Hi guys, [
]We have looked into rent assistance under centrelink. There are many rules as to whether a person/couple can recieve this assistance under the current guidelines.
We have advertised for leads in a high growth area in central NSW. One response was from a potential purchser who is on a pension.
This purchaser is keen to get out of the renters market.
[?] Can a purchaser who has proved themselves as a good tennant under a lease agreement get a loan from a bank — without having an income?? I.e.: does a pesion count as an income?
We would really like to help this purchaser to own their own home.
Can anyone give any advice on this situation??
tj
TJ
If a person doesn’t have an income in some shape or form that won’t get finance as they won’t be able to pay back the loan, unless I guess they have assets they can sell.Re a person on the pension I guess it depends on the repayment requirements and whether they can prove that they can repay to the banks satisfaction.
I don’t think being a good tenant on its own will convince the banks.
What does everyone else think?
BBHi TJ
Yep, the banks will count pension income towards serviceability (provided it’s ongoing). However, the pension isn’t that must is it? Their maximum borrowing capacity would not be that great.
However, the main thing this person will need to prove is genuine savings. That is, they will need to demonstrate that they have been able to save 5% of the property’s value over at least 6 months. Some lenders may only require 3%.
There is an argument that someone paying rent (instead of saving) has demonstrated that they have the spare cash to meet loan repayments. However, lenders will probably only take this into account in some situations (i.e. if someone’s been paying a very high rental or if they only have 4% genuine savings – they are margial).
Cheers
Stu
Property & Finance News
at http://www.prosolution.com.auThanks Stu,
As an indication of the committment this potential purchaser has — [?] do you think it would be a good idea for us to propose a savings goal for the next 6 months, and revisit with them after an agreed date?
This way they have some money to put towards the deal (deposit, reno’s, etc) and also have demonstrated that they are serious about committing to the deal. This should also satisfy the banks requirements of saving 3-5% of the purchase price.
What do you think?
tj [^]
I’ve find it’s hard to get commitment from wrappees nowadays for 6 minutes let alone for 6 months!
Good luck
Cheers
David U
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