Forums / Getting Technical / Finance / First Home Owner Loan Advice Needed!

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  • Profile photo of Eagle75auEagle75au
    Participant
    @eagle75au
    Join Date: 2014
    Post Count: 3

    Hi,

    I am self employed showing only 1 year of decent income, have been in business for approx 4 years.

    I am currently about 2 weeks away from a Home Loan application, have already signed Land & House contracts (subject to finance). Prior to doing so we spoke to a broker. We were told that we would could easily obtain a loan with only 1 year tax return and a guaranteed contract of work for the 2nd year, we were then told we would need 5% (roughly $19K) and that the bank would lend us the other 95% with LMI. We were also told that we could then use the $10K FHOG to to contribute to our own genuine savings of $9K to make up the 19K needed. As of Monday 11th August we would have this all in place.

    (Enter replacement broker) Now we are told that the 19K must be ALL genuine savings and that the 10K FHOG cannot be used as part of this?

    Can someone please shed some light on this? .. Is the new broker correct or should we start looking at ANOTHER replacement?

    I dare say that the Builder is not going to wait yet another 12 weeks while we save another 10K.

    Thanks

    • This topic was modified 5 years, 2 months ago by Profile photo of Eagle75au Eagle75au.
    Profile photo of PLCPLC
    Participant
    @plc
    Join Date: 2012
    Post Count: 400

    Generally FHOG isn’t classified as genuine savings by lenders and can’t be contributed towards the 5% deposit.

    Have you rented somewhere with an agent for a long term period? Some lenders take this as qualifying for genuine savings and then you can use other funds to come up with the 5%?

    Some lenders also do non-gen, savings at 95%LVR, but they are normally more restrictive with qualification criteria.

    Cheers

    Tom

    PLC | Phoenix Loan Consulting
    Email Me | Phone Me

    Melbourne based Mortgage Broker | Making Finance Simple

    Profile photo of WA Handy ManWA Handy Man
    Participant
    @andyi
    Join Date: 2014
    Post Count: 2

    Hi Eagle75, it would seem that the first broker may have given you the wrong advice.

    There are a few lenders that will look at one year financials only. It happens that those same lenders require the $19K to be genuine savings. Have said that, these lenders will deem your contribution as genuine savings if it is left in your account for 3 months, saved or not.

    There is also the option of using a third party security guarantor, this can alleviate the need for savings at all.

    • This reply was modified 5 years, 2 months ago by Profile photo of WA Handy Man WA Handy Man.
    Profile photo of Richard TaylorRichard Taylor
    Participant
    @qlds007
    Join Date: 2003
    Post Count: 12,010

    Eagle, many ways to skin a cat.

    Yes you can do a deal using your last years Tax Return information as long as you have been in business for 2 years plus.

    More information needed to ascertain what could be done.

    Cheers

    Yours in Finance

    Richard Taylor | Mortgage Broker helping investors build their wealth thru property
    http://www.mortgagecapitalaustralia.com.au
    Email Me | Phone Me

    0-40 Properties in a decade with a unencumbered portfolio value in excess of $40M. Ask me for a copy of my API Interview.

    Profile photo of Eagle75auEagle75au
    Participant
    @eagle75au
    Join Date: 2014
    Post Count: 3

    Thanks for the feedback,

    As stated i have been in business for approx 4 years, with only last years tax return showing a profit of approx 45K, i purchased a car worth 3K so 42K showing. I now have a contract with a client that states i will receive a minimum of $60K per year with no end date (from this client only) I will receive funds from other clients I have on top of this and genuine savings now of $8500 saved over the past 14 weeks at $500 per week. I have been paying rent of $200 per week for the past 3 years. I have 3 utility blemishes on my credit report (from a previous relationship) totaling $2K dated back from 2011 which have been paid in full and updated as paid on the file, these will be cleared by 01/16.

    I am trying to obtain a loan of $330,000 for a new house purchase, total house & land price is $360,000. I am legible for the FHOG of 10K in Victoria. I would be grateful for any feedback on whether its worth pursuing, and if i have any chance at all of obtaining the finance, and even of a broker / lender who would look at this with a positive outcome.

    Thanks

    Profile photo of Kinnon BellKinnon Bell
    Participant
    @kinnon
    Join Date: 2014
    Post Count: 151

    It’s a tricky one with a few things not working in your favour. There’s some non mainstream lenders that *may* look at this but your interest rate wouldn’t be as competitive as you may like it to be. Are you the only one applying for the loan or is there a second applicant?

    Kinnon Bell | Kinetic Funding
    http://www.kineticfunding.com.au
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    Mortgage & Personal Loan Broker based in Cairns and Melbourne but servicing clients Australia wide.

    Profile photo of Eagle75auEagle75au
    Participant
    @eagle75au
    Join Date: 2014
    Post Count: 3

    I would be the only applicant I understand it may be a higher rate but that’s something I can live with!

    Profile photo of Richard TaylorRichard Taylor
    Participant
    @qlds007
    Join Date: 2003
    Post Count: 12,010

    3 defaults marks out any standard lender for the next couple of years to non standard lenders only.

    As far as I am aware only 2 that would do 92% on such a deal and one of the wouldn’t do construction.

    Going to also need funds for their risk fees, applic etc.

    Cheers

    Yours in Finance

    Richard Taylor | Mortgage Broker helping investors build their wealth thru property
    http://www.mortgagecapitalaustralia.com.au
    Email Me | Phone Me

    0-40 Properties in a decade with a unencumbered portfolio value in excess of $40M. Ask me for a copy of my API Interview.

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