Refinancing with no current job

Viewing 7 posts - 1 through 7 (of 7 total)

propertyboy
Participant
@propertyboy
Join Date: 2008
Post Count: 232
August 25, 2017 - 9:35 am
Hi everyone,
One of my properties has 50% LVR due to property growth.
I am currently on career break and have not been in work for 4 months now but been comfortably repaying the interest. My property is also leased for 2 years.
Can I refinance back to 80% LVR or even just refinance to a lower rate at the same LVR with another bank?
Am i effectively locked into this higher rate until I find a job?
Corey Batt
Participant
@cjaysa
Join Date: 2012
Post Count: 1,010
August 25, 2017 - 10:33 am
Unless you have substantial income elsewhere it is doubtful. Lenders are required by law to look at your overall financial situation and stress test any debts etc. This means that before even considering what your existing IP mortgage is – they will plonk living expenses of $24,000+ p.a they will want to see covered, only take 80% or less of the rent you receive, stress test the mortgage repayments of your mortgage by more than double etc.
Corey Batt | Precision Funding
http://www.precisionfunding.com.au
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Investment Focused Finance Strategist - servicing Australia-wide
Terryw
Participant
@terryw
Join Date: 2001
Post Count: 16,213
August 26, 2017 - 4:13 pm
A straight forward no!
Without the ability to pay the loan back it would be a breach of the nccp act for a lender to lender you money.
Terryw | Structuring Lawyers Pty Ltd / Loan Structuring Pty Ltd
http://www.Structuring.com.au
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Lawyer, Mortgage Broker and Tax Advisor (Sydney based but advising Aust wide) http://www.Structuring.com.au
Richard Taylor
Participant
@qlds007
Join Date: 2003
Post Count: 12,024
August 26, 2017 - 5:13 pm
Without the ability to pay the loan back it would be a breach of the nccp act for a lender to lender you money.
Not quite correct as NCCP only applied where the term of the loan is more than 62 days.
We do a lot of short term private loans where the borrower has a clear exit strategy but on paper does not appear to have sufficient income to service a traditional loan.
Cheers
Yours in Finance
Richard Taylor | Australia's leading private lender
Jamie Moore
Participant
@jamie-m
Join Date: 2010
Post Count: 5,069
August 29, 2017 - 9:20 am
propertyboy wrote:
Can I refinance back to 80% LVR or even just refinance to a lower rate at the same LVR with another bank?
Hiya
Probably not with a mainstream lenders unless you are deriving a lot of income from other sources.
Cheers
Jamie
Jamie Moore | Pass Go Home Loans Pty Ltd
http://www.passgo.com.au
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Mortgage Broker assisting clients Australia wide Email: [email protected]
propertyboy
Participant
@propertyboy
Join Date: 2008
Post Count: 232
September 26, 2017 - 9:38 pm
So you saying banks have existing default clauses requiring you to pay back the loan if your financial situation changes post loan funding even if you are meeting interest payments? Or for resi loans once the moneys lent as long as interest it paid its all fine even if the borrowers financial situation changes
I know commercial loans have quarterly interest coverage covenants etc but I can’t see monitoring clauses in big 4 funded loans
- This reply was modified 6 years, 6 months ago by propertyboy.
- This reply was modified 6 years, 6 months ago by propertyboy.
Colin Rice
Participant
@fms
Join Date: 2011
Post Count: 338
October 12, 2017 - 5:47 pm
2 major boxes need to be ticked;
1. Security – being at 50% you are sweet there
2. Income – you will need to demonstrate income above and beyond all outgoings including living expenses which will leave you with surplus income that would need to cover the repayments at between 7-8% inmost cases.
Colin Rice | CDR Finance
http://cdrfinance.com.au/
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Perth Based Mortgage Broker - Investment Property Finance Specialist | E: [email protected]