Buy or Rent, Self-Employed, Have Savings but Low-Income- Will I Get a Loan?

Geekomatic on 08/12/2014 - 12:08

So, basically I have a new business (one year old) & $40,000 in savings. I'm a single mother, two kids (one, (15) in HS, one (20) at uni). Their child support is $100 each, per week- not much, but buys a grocery trip. I am receiving family tax benefit A&B. My son is on Youth Allowance as a full-time student.

I pay $320 per week for our rental. The house is small & my business was taking over our tiny living space so I took on the granny flat for my business in March of this year @ $210 per week.

I earned about $16000 last year after deductions. I'm doing a bit better this year & hope to see that rise continue. I have not touched my savings in over five years— it continues to increase with interest via ANZ progress saver.

My question is: where to go from here? I'm paying out $530 a week on a rental. I hate to see that money going down the drain, but not sure if my actual income position would be too low to get a loan— though I've not touched my savings for a long time (which ought to show I am managing on what I have to work with?).

Obviously, I'll go to ANZ & see what they say, but there seems to be a lot of knowledgable people here at OzB & figured I'd float the query out to you all to get some impressions.

Thanks in advance, for your time & ideas.

Cheers

Financial

Comments

  • Cheeper on 08/12/2014 - 12:21

    Best to get the answer from the lender directly.
    One place may dismiss you when another would be glad to do business.

    Print out your financial situation and get anything that will confirm your income sources and make an appointment with several institutions, not just one.

    Their main criteria is your ability to service the loan and they are the ones who decide if you can or not.

    Good luck.

  • Geekomatic on 08/12/2014 - 12:37
    +1

    Hello xywolap,

    Yes, I do plan to check other sources, but figured I'd start w/ANZ since they can see the savings has been with them for quite a while now.

    I just thought I'd ask here because everyone is so "good deal oriented" & hope to find someone who's been in the same sort of financial boat & succeeded.

    Thanks for your advice.

  • 2jzzzz on 08/12/2014 - 12:38
    +2

    Go and speak to a broker. They can give you a range of options. I'm paying under $500/week to own a house in Melbourne.

    My broker is Dannielle Jackson from Provincial Homes. She was a god send for us. Set us straight financially, helped us budget and then helped us search. She even organised our free yearly valuation :-)

  • Gunther on 08/12/2014 - 12:51
    +1

    You could also get a better saviungs rate than that ANZ progress saver if you shop around.

  • Geekomatic on 08/12/2014 - 13:09

    *I meant to add that this is a first-time home purchase, so I might qualify for whatever rebate/deal that's out there, too.

    The owner of the property we're in has had this property evaluated— supposedly to refinance. But, he later asked if I might be interested in purchasing. He said he did some figures & that I may only pay another $100 per week (cutting out the real estate agent fee). But, I'm wondering how he calculated it— I'm 53, so no 30 yr. loan. And I know when you go from 30 to 20, the payment jumps substantially.

    I just feel like I'm pouring good money down the drain by renting. Truthfully, I'd be happy with some scrubby land & a caravan or granny flat. I don't need anything flash, though I'd love solar panels/HWS, rainwater tank, & windmill!

  • sweefu on 08/12/2014 - 14:53
    +3

    As has been mentioned above, go and see a good broker.

    They can add real value to a difficult lend, and it doesn't cost you anything.

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