Forums / Getting Technical / Finance / Serviceability Woes!

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  • Profile photo of TomTom
    Participant
    @tom4c4
    Join Date: 2017
    Post Count: 2

    Hi Everyone,

    I find myself a little disheartened. I was looking to purchase my second IP this year but my refinance application was rejected due to serviceability. I’m in a good position equity wise (over $300,000) and lowish LVR. The only issue is that my wife, who is not dependent on me financially, is not working. I’m told that if I was single, I would be able re-finance without any issues. Usually we would look to get some part time work but atm my wife cannot work. Short of getting a divorce (joke!), is there anything I can do or are there any lenders out there atm that would allow to re-finance based on my situation? Many thanks.Tom

    • This topic was modified 2 years, 4 months ago by Profile photo of Tom Tom.
    Profile photo of Corey BattCorey Batt
    Participant
    @cjaysa
    Join Date: 2012
    Post Count: 1,010

    Plenty of potential options – some lenders will look at this situation more favourably than others.

    Speak with an investment focused broker who can sort this out for you. There’s a wide variety of ways each lender calculates serviceability, it’s just a case of using the right one for the right deal.

    Corey Batt | Precision Funding
    http://www.precisionfunding.com.au
    Email Me | Phone Me

    Investment Focused Finance Strategist - servicing Australia-wide

    Profile photo of D.T.D.T.
    Participant
    @dtraeger
    Join Date: 2014
    Post Count: 128

    I had similar when I first started. Was only a couple properties in and bank / broker said no more. I think this is because most are transactional, ie look at that transaction in isolation rather than considering your plans to have a dozen properties and mapping the whole way forward strategically.

    Corey who posted above has done our last 10 finances / refinances and is well worth a chat if you want someone like the latter.

    D.T. | DT Property Management
    http://www.dtproperty.com.au
    Email Me | Phone Me

    Adelaide Property Management - whole Adelaide metro

    Profile photo of blackhotelblackhotel
    Participant
    @blackhotel
    Join Date: 2010
    Post Count: 139

    Same thing happened to me when I tried to refi, except my wife & I happened to break-up before I put the application in. She moved in with her mother. And guess what after the refi was completed we magically got back together – go figure!!!! Beat them to there own stupidity.

    Profile photo of D.T.D.T.
    Participant
    @dtraeger
    Join Date: 2014
    Post Count: 128

    Same thing happened to me when I tried to refi, except my wife & I happened to break-up before I put the application in. She moved in with her mother. And guess what after the refi was completed we magically got back together – go figure!!!! Beat them to there own stupidity.

    Hope they’re not reading these forums :)

    D.T. | DT Property Management
    http://www.dtproperty.com.au
    Email Me | Phone Me

    Adelaide Property Management - whole Adelaide metro

    Profile photo of Richard TaylorRichard Taylor
    Participant
    @qlds007
    Join Date: 2003
    Post Count: 11,992

    Tom, there are additional refinance options we can offer you the difference in these the rate of interest will be higher than you are currently paying.

    Reason we went with Qudos Bank was a combination of servicing and interest rate.

    I am back from overseas early next week so will come back to you with the lenders who will do your deal and the relevant interest rates etc.

    Unfortunately without income evidence for your wife sufficient to cover her living allowance all lenders are going to assess you as a married couple and take the joint living expense as a liability.

    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 TomTom
    Participant
    @tom4c4
    Join Date: 2017
    Post Count: 2

    Cheers for that Richards. I look forward to having a chat next week.

    And thanks all for your comments.

    Tom

    Profile photo of Jamie MooreJamie Moore
    Participant
    @jamie-m
    Join Date: 2010
    Post Count: 5,065

    Short of getting a divorce (joke!), is there anything I can do or are there any lenders out there atm that would allow to re-finance based on my situation? Many thanks.Tom

    Get a second opinion.

    Especially if you focused the bank directly.

    Plenty of decent finance guys/girls around here that would be willing to assist.

    Cheers

    Jamie

    Jamie Moore | Pass Go Home Loans Pty Ltd
    http://www.passgo.com.au
    Email Me | Phone Me

    Mortgage Broker assisting clients Australia wide Email: [email protected]

    Profile photo of Richard TaylorRichard Taylor
    Participant
    @qlds007
    Join Date: 2003
    Post Count: 11,992

    Hi Tom

    Emailed you yesterday so have a read.
    Not an issue in getting the deal done with another lender it is just the rate of interest etc.
    Problem being is that both your current home loan and equity loan would end up being charged at a higher rate of interest than you are currently paying.

    If it was just the new investment property loan then fairly easy but issue is we need to come up with the deposit and acquisition costs from somewhere.

    Hope this helps.

    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 KostaKosta
    Participant
    @kostadok
    Join Date: 2016
    Post Count: 7

    Hi folks,

    Are there any lenders that have favourable serviceability views when it comes to Parental leave? My wife is on 12-months leave from work, and with our income now halved, feel like all the major lenders don’t want anything to do with re-financing or/and pre-approvals.

    Admittedly we were already ‘maxed out’ with IP’s, but surely there’s options for high equity/low cash Investors like ourselves.

    Cheers in advance!

    Profile photo of Corey BattCorey Batt
    Participant
    @cjaysa
    Join Date: 2012
    Post Count: 1,010

    There’s definitely lenders out there who will work with people where a partner is on maternity leave. Depending on your servicing will depend what’s the best option.

    Mat leave has been an area where the lenders have improved in recent time with their policy – in general we need to have a letter from the employer stating a return date, hours of work when they return, how much they will earn etc.

    If you have a cash buffer to help between that time to meet any needs, that goes into the mix of supporting your position.

    Corey Batt | Precision Funding
    http://www.precisionfunding.com.au
    Email Me | Phone Me

    Investment Focused Finance Strategist - servicing Australia-wide

    Profile photo of Richard TaylorRichard Taylor
    Participant
    @qlds007
    Join Date: 2003
    Post Count: 11,992

    Hi Kosta

    Yes there are certainly lenders who will take her full return to work income when calculating servicing.

    Letter from the employer confirming details etc will certainly help.

    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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