Home Loan on a Single Salary and Home Based Business

trinkasharma on 08/11/2019 - 12:21

I have a job paying 95K plus PA before tax. I have three months more in my current contract. I have been working here for last 2 years 2 months.

Spouse has a new business, generating 1000 AUD per month profit for now. As it a new venture, we are yet to pay GST. This is expected to go up but not in immediate future.

We are a first time buyer. We also have cash around 300K AUD here and in India.

How hard is it to get a loan approval for a 600K home with these parameters?

Any Melboune based loan brokers in this group?

TIA!

Financial Home Loan Loan

Comments

  • holdenmg on 08/11/2019 - 12:28

    Is your contract to be renewed?

    • trinkasharma on 08/11/2019 - 13:32

      Actually I was expecting to be made permanent. I should be offered another one soon for at least months.

  • RM on 08/11/2019 - 12:43

    Hey..I can recommend a Melbourne based broker. PM me and will send you her details..

  • tsunamisurfer on 08/11/2019 - 12:48
    +2

    The 300k in cash will need to be in Australia to mean anything.

    If you are looking to buy in the 600k region and have a deposit of $300k it will put you in a much better position.

    $95k is enough to cover $300k loan without needing to use your wife's income.

    But if there is any chance your contract is not going to get renewed or you are starting a new job, you need to get the loan earlier.

    If you are a new job you will not get a loan.

    • trinkasharma on 08/11/2019 - 13:34

      100k is in NAB. Rest can come in short notice.

      300k is not all mine. It has 160K from wife's side. That can be flown fairly fast.

      • mick123 on 08/11/2019 - 16:56
        +5

        If you are flying the cash in, you will need about to put aside approx $75,000 to hire El Chapo's plane and another $10,000 for the customs officers to look the other way..

        • Cheapskate Paul on 08/11/2019 - 23:02
          +1

          There is no limit to the amount of legitimate cash you can bring into the country. You just have to declare it so that customs can check that it is indeed legitimate.

  • 87percent on 08/11/2019 - 12:54
    +2

    even if his contract is renewed, because you're a contractor, they look at your income differently

  • [Deactivated] on 08/11/2019 - 13:00
    +1

    If you can prove you have $300k, you'll get the remaining $300k loan approved easily.

    If you bought property at $600k with $300k deposit, should you default, the bank should easily be able to sell the property for $400k hence making $100k in the process.

    In this circumstance, it is in your interest to seek a loan you can actually service.

    • trinkasharma on 08/11/2019 - 13:35

      In this circumstance, it is in your interest to seek a loan you can actually service.

      Well said.

  • Seraphin7 on 08/11/2019 - 14:36
    +1

    Based purely on numbers, a $325k loan (you'll need at least another $25k to cover costs primarily including stamp duty) should be fairly doable based on what you've presented.

    You'll likely need to produce two or three years worth of tax returns to substantiate your income (I'm assuming your income has been effectively the same over the past two or three years).

    You're spouse's income won't be considered, and frankly I'd leave out anything about a new business. This can be seen as a money sink in the eyes of a home loan credit analyst. I'd just go with a spouse that's currently unemployed (perhaps a stay at home parent?).

    As ever, you need to take your own advice, speak to brokers, etc., but what you've presented seems fairly "mainstream".

  • garetz on 08/11/2019 - 14:39

    You are in a very good financial position to borrow up to 600k, propably look at 80% lvr loans. Even on 95k, that alone would get you a 480k loan on a 600k purchase with 20% deposit at current rates. Just factor in interest rate rises into affordability.

    • Cheapskate Paul on 08/11/2019 - 23:05
      +2

      Also factor in that you actually have to repay the principal!

  • chumlee on 08/11/2019 - 14:52

    If you put $300k into the property & borrow the other $300k it will be fine.

    Are you putting in the $300k cash or just want t the bank to see you have cash in your account, which could have been given to you by family on a short term basis to get a loan (that's how lenders see it)?

  • mick123 on 08/11/2019 - 15:42
    +1

    avoid ANZ if you want a smooth experience.

    • trinkasharma on 08/11/2019 - 16:25

      How is NAB?

      • mick123 on 08/11/2019 - 16:56

        I'm not a broker, or in finance, just talking on my personal experience

      • Gelato on 08/11/2019 - 23:16

        if you are on a contract, nab would shade (discount) your income by quite a bit. Maybe 20% but im not sure of %.

        for other online non-ADI institutions they will not approve loan based on contractor's income, because this is riskier than people on permanent PAYG income. Non-ADIs have a very low appetite for risk.

        though if you're buying for 600k and already have 300k, then serviceability may not be an issue for you if you are going with nab.

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