Hi,
I am not working and on maternity leave currently. My partner earns a good wage and is supporting me.
We have $160k in cash savings currently. We would like to buy a house for around $550k. I have just been informed that as my partner will be shortly supporting 2 dependants (myself and bubs), and even though we have $160k in cash, we can still only buy a house for MAXIMUM $415k!!!This means they will lend us only a few hundred thousand /?!? Yet if we didn't have the baby, and I was single, i could borrow $450k on my own apparently..
This doesn't seem right?!? Can someone please provide advice? We are currently paying $550 per week in expenses on ONE wage, surely that means we could afford to pay a mortgage equivelant of $550 per week in repayments?
Just doesn't seem to make sense and doesn't seem fair!
Thanks again, any advice is appreciated.
Hi Shel
You could speak with another lender for a second opinion. Different lenders have different ways of calculating borrowing capacity – some are more generous than others.
However, all would base your borrowing capacity on hubbys income alone if he’s the only one working. Unfortunately, while your cash savings are impressive, the bank will want to know that you can service the debt.
Are you planning on heading back to the workforce? Once you’re back at work, this will improve your borrowing capacity.
My advice would be (and it’s going to sound biased) to speak with a mortgage broker who can assess your borrowing capacity across a range of lenders.
Cheers
Jamie
Jamie Moore | Pass Go Home Loans Pty Ltd
http://www.passgo.com.au
Email Me | Phone MeMortgage Broker assisting clients Australia wide Email: [email protected]
Hi Shel
Hate to say it happens all the time and with the serviceability rates for a few lenders increasing again from Monday borrowing amounts will fall.
As Jamie mentioned all you need to do is look at an alternative lender or consider using a mortgage broker.
From the lenders perspective what you have to consider is that at the moment your hubby has to support 2 adults but shortly it will be 2 adults and a little one. Yes they maybe some FAB to add in for income but expenses are likely to increase. Kids cost money trust me i have 3.
Also under the new Credit Act the lender is responsible for taking into consideration any factors within the next 2 years which may influence your capacity to borrow and repay the loan. Imagine if you said you were thinking of having another 1 in 18 months you could probably afford a garden shed.
In saying all of this you would be suprised at the varying amounts you can borrow from lender to lender so certainly look at getting an second opinion.
Cheers
Yours in Finance
Richard Taylor | Australia's leading private lender
I think you may be able to do a low doc loan, but you would have to pay mortgage insurance and I'm not sure what the amount is for a house around the $550K mark.
Also, if you have only just gone on maternity leave and your payslip is still current, then you may be able to get a full doc. When I went on maternity leave I took my last pay slip borrowed as much as we could and put it back onto our loan in a redraw facility just in case we wanted to buy anything while I was on maternity leave.
Cheers
BecHi Bec
Hate to say you wont get a lodoc loan being PAYG and secondly making a false income declaration is mortgage fraud and certainly not recommended.
Like anything if you cant get the deal over the line then there is probably a reason for it.
Cheers
Yours in Finance
Richard Taylor | Australia's leading private lender
Qlds007 wrote:Hi BecHate to say you wont get a lodoc loan being PAYG and secondly making a false income declaration is mortgage fraud and certainly not recommended.
Like anything if you cant get the deal over the line then there is probably a reason for it.
Cheers
Yours in Finance
Totally agree. Besides, you wouldn’t want to risk putting yourself under financial strain with a new arrival on the way.
Cheers
Jamie
Jamie Moore | Pass Go Home Loans Pty Ltd
http://www.passgo.com.au
Email Me | Phone MeMortgage Broker assisting clients Australia wide Email: [email protected]
Thanks everyone for your comments. I will be trying out a few different lenders and mortgage brokers and see how we go.
I just feel it's really unfair given that i've got so much cash, yet we can only be loaned such a small amount, even though the house we bought would obviously have a huge equity instantly. Anyway, just so frustrating!But thanks for your thoughts…
shel25 wrote:I will be trying out a few different lenders and mortgage brokers and see how we go.Hi Shel
When shopping around, you need to be careful about inquiries being logged against your credit file. Too much activity on the credit file could jeopardise your chances of getting the finance. I’ve seen it before – someone pops into a few branches and by the end of the day, a few lenders have provided pre-approvals (resulting in 3 or 4 hits to the credit file).
Probably best just to work with one broker that you feel comfortable with.
Cheers
Jamie
Jamie Moore | Pass Go Home Loans Pty Ltd
http://www.passgo.com.au
Email Me | Phone MeMortgage Broker assisting clients Australia wide Email: [email protected]
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