What would you do in my situation? (Home Loan/Business/Starting a family)

CryssieJade on 29/04/2022 - 14:32
Last edited 29/04/2022 - 14:33

Tricky situation here and a lot of things going on, so bear with me…

  • Casual/Self Employed wage (Photographer). No possibility of going full time with my employer.

  • Been saving for a house deposit for 4 years, I have saved a very healthy deposit.

  • The only broker that has offered me a loan of any kind, has told me that I can borrow only $130,000 (I was hoping for $200,000).

  • My loan application is tricky because of my income source, and that my industry was affected by lockdowns. Lenders barely want to know about me because I was on Jobkeeper.

  • I have been advised to potentially wait until June 30 so that my next tax return could make my loan amount higher (Self Employed/Casual loan applications are based on multiple tax returns to show a pattern of yearly 'salary')

  • The problem is, I was on government payments this financial year too, because of Covid lockdowns, so it's not as though that 'undesirable income' is going to drop away any time soon

  • I am 38, planning to have children, so time is of the essence with that too

  • I can't wait for this loan forever, and I need the loan before I can start having children (dependants will affect my tiny borrowing power).

  • My other option is to give up everything I've worked for for years as a Sole Trader, and just get a full time job doing anything, so that I can get the loan I want, and fast. OBVIOUSLY I don't want it to get to that, because I'm proud of the business I have created.

Any advice? Thoughts? What would you do?
Would you keep chipping away at your own business that you love and have worked so hard to build and take the small loan so you can make your dreams of having a family come true? Or would you get a full-time job in any industry just to get the loan you wanted, give up everything you've worked hard for for so long, in order to do the same?

I'm just so torn.
For the record, I live in suburban Melbourne and I intend to stay here.

Financial

Comments

      • MrMarket on 06/05/2022 - 20:34

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    • moar bargains on 30/04/2022 - 13:16
      +3

      hard assets

      Yeah ok buddy, we all know by now which of your assets gets hard when you mention Bitcoin.

  • Drakesy on 29/04/2022 - 17:36
    +3

    How big exactly is a healthy deposit?

    To get a loan limit of that i'd imagine your annual wage is around $40/50k a year, which after a baby unfortunately won't leave you with much wiggle room hence the bank's apprehension.

    • CryssieJade on 29/04/2022 - 17:45
      -4

      You are (almost) correct. But the bank doesn't know my plans to have children, nor will they. I have no dependants right now. That is the truth, and that is what they know.

      JobKeeper lowered that amount, however 😕

      • pat25d on 30/04/2022 - 06:09
        +17

        They will ask you to sign that you are not aware of anything that will impact your financial situation, which given you're about to start IVF would mean you are intentionally withholding information from them (i.e. lying).

      • MrFunSocks on 01/05/2022 - 10:57
        +7

        What are you going to do when you are heavily pregnant and then have a child? Costs will go through the roof and you'll be on government minimum wage maternity leave, and now have a mortgage to pay off as well.

        Sorry but it really doesn't sound like you're in any position financially to buy a house or have a child.

        • CryssieJade on 01/05/2022 - 11:54
          +2

          I have a separate bank account with a savings that I've put aside for that purpose. Plus people give away so much for free that I won't be spending any money on a nursery. Or a car seat. Or a pram. And I'll be using cloth nappies. I'm not your typical consumer. I live off of practically nothing (plus savings to boot).

          • drfuzzy on 02/05/2022 - 19:24
            +1

            @CryssieJade: If you can get someone to give away 200k then you won't need the loan.

          • MrFunSocks on 03/05/2022 - 10:01
            +1

            @CryssieJade: I don't think you're going to be getting any car seat you'd want to put your kid in for free lol. You should also never be budgeting for everything to be just free.

    • [Deactivated] on 01/05/2022 - 10:14

      If you earn around 55k, you can normally borrow yo to 300k+

      It could be because she's a business owner.

      • CryssieJade on 01/05/2022 - 11:55

        That's exactly what it is.
        Plus Covid lockdowns/government payments thrown in, because I, and a massive percentage of the population, work in Covid affected industries.

        • mini2 on 02/05/2022 - 16:20

          I'm surprised your lender isn't giving you grief over you've only just traded for 12 months. ANZ's the only one that will touch anyone in this pickle.

          • CryssieJade on 02/05/2022 - 19:08

            @mini2: I've been trading for almost 4 years. I'm in Melbourne, so most of the past 2 years have been on and off during never ending Covid lockdowns

  • pharkurnell on 29/04/2022 - 19:09
    +4

    What would I do? I wouldnt be getting a housing loan on such a small income…. What happens when teh stove dies? or washer/dryer etc.

    bank may not know of your plans to have kids, but they would put that possibility into their equations anyway

    If the job keeper thing is killing your loan amount, wait another 12 mths and save another $x000 for your deposit, and wait for the job keeper thing to disappear out of the equation.

    What areas are you looking at buying?

    • CryssieJade on 29/04/2022 - 19:38
      -3

      I will be starting my journey of having a family within the next 6 months, so I cannot wait.

      • pharkurnell on 29/04/2022 - 23:48

        Postpone it.

      • MrFunSocks on 01/05/2022 - 10:58
        +6

        Well you absolutely shouldn't get a mortgage in that case. Your income will be minimum wage maternity leave while now having all the extra costs of a child.

        Go live with your mum, that's your only realistic option imo.

        • syousef on 02/05/2022 - 13:44
          +3

          I didn't want to say it so bluntly but I have to reluctantly agree with this assessment. It's harsh. But life can be harsh.

          OP if you have a child with any kind of medical issues, or get ill or injured yourself, you're going to make your own life and theirs miserable. You will quickly learn the limits of Australian social welfare.

          A conservative estimate of the cost of raising a child is $18,255/year https://www.finder.com.au/cost-of-raising-kids

          What do you earn after tax? Subtract your home repayments and $18/year. That's what you're going to live on - food, utilities, transport, and entertainment.

          OP will be able to find people who will give all kinds of advice that will supposedly give her what she wants, but none will be reputable and it won't end well.

  • Some Human on 29/04/2022 - 20:34
    +6

    My other option is to give up everything I've worked for for years as a Sole Trader, and just get a full time job doing anything, so that I can get the loan I want, and fast. OBVIOUSLY I don't want it to get to that, because I'm proud of the business I have created

    Try paying your bills with your pride, then report back.

    Seriously, just get a full time job in a factory or something for a year until you get the loan, then you can do what you want. There is such a thing as afternoon shift and night shift, so you could do your photography during the day or have it as a side hustle.

    I will say I do commend you for being realistic about the property you wish to acquire. I have a friend on 45k a year with very little savings who wants to buy a 700k house and won't settle for anything less.

    • CryssieJade on 29/04/2022 - 21:04

      Fair point, and I have definitely seriously considered this already! As much as I don't want to, I also feel that my life needs shaking up to get what I (really) want. I could get a full time job in photography pretty easily. The problem is that there are not huge amounts of them. Most are casual/seasonal. I have been looking, and will continue to look.

      I feel bad for your friend. But I also understand that blind faith. I still have it, albeit with a little more sensibility involved (and maybe a little more life experience, too). Boundless optimism!

    • syousef on 02/05/2022 - 14:07
      +1

      I don't know what loans are like now, but 20 years or so ago when I signed up for my loan a condition of the loan was that I keep a full time job. The bank actually gets to sell the house if they choose to if I am not in full time employment.

      • CryssieJade on 02/05/2022 - 19:11

        Bit different now, but circumstantial, of course.

        • syousef on 02/05/2022 - 20:29

          The point is I very seriously doubt getting a job with the intention of ditching it a year later is a viable course of action. I think you'd end up in quite a mess and possibly lose your home, and potentially still be in debt.

  • Matt P on 29/04/2022 - 21:02
    +2

    Have you considered buying the house you want as an investment property? This could mean the rental income (the agent will write you a letter with the expected income p/w and the bank will accept a percentage of that IIRC 70-80%) will add to your income and tip you over into the serviceability that you need? Not sure where you're living now but maybe move back in with mum for 12-18 months and after the initial months with the expected future little one and you're in a good routine you move into the new place?

    It will mean there will always be a period that it was an investment so when (if) you ever sell it, you will have some capital gains tax to be paid. Other downsides, you will pay a higher interest rate in the short term while it is an IP. The other advantage, being an investment loan, you may be able to go down the path of "interest only" while you're on a reduced income in the latter stages of pregnancy and with a newborn.

    Anyway, the usual not financial advice etc..

    • CryssieJade on 29/04/2022 - 21:06

      At this point in my life this is not an option, but a couple of years ago I was considering it. Circumstances change.

    • Drakesy on 01/05/2022 - 15:57
      +3

      10/10 would not recommend paying rent and owning an investment property on minimum wage with a kid

      Would result in an insufferable amount of stress and not be conducive to a great environment with a kid

  • bemybubble on 29/04/2022 - 21:14

    Can I ask what your current living arrangements are now??

    • rektrading on 29/04/2022 - 21:40
      -4

      38
      female
      single
      income $40,000 to $100,000
      deposit $84,000

      • CryssieJade on 29/04/2022 - 23:57

        Lol, keep guessing!

  • TheBilly on 29/04/2022 - 22:49
    -1

    If its kids that bothers you and the whole biological clock. This is all just chance right, I know people in their late 20's for whom things just aren't working out. I know people in their late 30's who breed like rabbits. Just live your life and see where it goes, do the things you want to do when you want to do them. If they work out they will, if not, that is just fate and it was never meant to be. Don't get so highly strung up on it.

    • CryssieJade on 29/04/2022 - 23:58
      +1

      I am doing the things I want to do when I want to do them. That's kind of the point 😂 I'm doing them all at the same time, because Covid robbed me (and everyone) of two years of their lives and everyone is playing catch up, in one way or another.

      Nothing is chance.
      I can have everything I want, if I work for it.

      • pat25d on 30/04/2022 - 06:11
        +2

        Well except what you actually want which is a mortgage.

        • CryssieJade on 30/04/2022 - 07:23

          I can still have one in my current situation, just a lower one than I hoped for. I'm not saying that's ideal, but I can still have it.

      • MrMarket on 06/05/2022 - 21:12

        you can have everything you want in life

        have beautiful kids
        beautiful home
        nice holiday
        investment portfolio with cash flow
        drive nice car, buy nice toys

        all that can be achieved it just not all at the same time

  • miwahni on 30/04/2022 - 01:26
    +5

    I can't tell you what is right for you to do, but bear in mind that if the RBA moves on interest rates next week as predicted, and then banks follow on with the increase, your borrowing power will drop. And rates are predicted to continue to rise for the foreseeable future. In line with this, property values are expected to drop between 15% to 20% once rates increase by 1%. So factor that in to your decision.

    Of course none of the above may actually happen, but these are the predictions of Christopher Joye from Coolabah Capital

    • rektrading on 30/04/2022 - 01:36
      -1

      but these are the predictions of Christopher Joye from Coolabah Capital

      😆

    • CryssieJade on 30/04/2022 - 07:24
      -2

      That's what they said 12-18 months ago too and everything went the opposite way, so I don't believe anything I hear anymore.

      • Jason Genova on 30/04/2022 - 10:42
        +3

        youre very optimistic, but just look at what central banks in US and other countries are doing to get an indicator

        • rektrading on 30/04/2022 - 10:51
          -1

          A +1.0% cash rate hike on $130,000 over 30Y is nothing.

          • MrFunSocks on 01/05/2022 - 11:01
            +1

            @rektrading: 1% cash rate increase will likely add 2% or more to the banks interest rates.

            • rektrading on 01/05/2022 - 11:06

              @MrFunSocks: That's about $40,000 over 30Y. That's not a big amount for a safe asset.

              The worse that can happen is they sell it and make a nice profit.

            • serpserpserp on 01/05/2022 - 12:31
              +1

              @MrFunSocks: No. A banks cost of funds doesn't double with each rate rise.

              • MrFunSocks on 01/05/2022 - 16:15

                @serpserpserp: Just like with cash rate reductions where banks don't pass on the whole reduction, banks will 100% add a lot on top of every cash rate increase. A 1% cash rate will be close to a 2% interest rate rise at least.

                • serpserpserp on 01/05/2022 - 16:54
                  +1

                  @MrFunSocks:

                  banks will 100% add a lot on top

                  Not 100% like you said. Market forces won't allow it.

                  • MrFunSocks on 01/05/2022 - 21:57

                    @serpserpserp: We'll see. I hope I'm wrong but I don't think I will be.

                    • serpserpserp on 04/05/2022 - 15:59

                      @MrFunSocks: Well rates are up 25bps and banks are only raising 25bps on nearly every variable product. Not 50bps like you have indicated.

      • greatlamp on 01/05/2022 - 07:46
        +2

        They didn't get it wrong 12 to 18 months ago, what they predicted was correct- prices would have crashed during a lockdown and recession.

        They didn't predict the situation changing with so much government stimulus via artificially low interest rates.

        Now most lenders are predicting prices could drop over the next 3 years in respons to high interest rates.

        If it doesn't happen, it will be because government policy changes the situation, not because the predictions were just inaccurate

        • CryssieJade on 01/05/2022 - 08:59
          -1

          People predicted that the prices would go down in those 12 months. They were very wrong.

          In the last 12 months, the area that I have been looking at has gone up $100k - and that's just for a 2 bedroom unit with a courtyard. I'd hate to think how much actual houses have gone up!

          • Drakesy on 01/05/2022 - 23:25
            +1

            @CryssieJade: We were in a recession before covid
            The government printed $500 billion + dollars
            It'd be prudent to think that this wouldn't artificially increase property prices.

            Only now the stimulus is wearing off with no more to come
            The inflation hangover is hitting hard
            And its only time until the leveraged investors start hitting the panic buttons and heading for the door.

            It couldn't be more black and white.
            Wage growth is zero
            Houses are the domain of gamblers now
            Now is not the time to be holding debt

        • johnno07 on 01/05/2022 - 08:59
          +3

          If it doesn't happen, it will be because government policy changes the situation, not because the predictions were just inaccurate

          So when I bet on the Broncos and they lose, I should go to Sportsbet and ask for my money back because my prediction wasn't wrong, they just didn't play well enough?

  • Third_Gear on 30/04/2022 - 08:17
    +1

    Increase your product offerings. I dont know what type of photography you do but product photography is always in high demand. Target e-commerce companies and run some FB ads.

    • CryssieJade on 30/04/2022 - 08:40

      I have tripled my clientele already, with more bookings coming in. It's nice to have this kind of growth, because it's the growth I knew I was capable of - except Covid lockdowns threw not just the spanner, but the whole toolbox into the works.

  • mortgagebroker on 30/04/2022 - 13:58
    +1

    Talk to a broker.
    Some lenders accept JobKepper income so that should not be an issue. - NAB, ANZ
    Do a security guarantee with your mother's unencumbered property, she can be on the pension. - St.George

    • CryssieJade on 30/04/2022 - 15:32

      I'm on my third broker already. It's a smaller, NAB based lender that will offer me the $130k.

  • fredblogs on 30/04/2022 - 15:10
    +3

    Why do you have to have a mortgage? Rent.

    • CryssieJade on 30/04/2022 - 15:33

      No thank you.

      Why would I pay off someone else's mortgage when I can pay off my own? Rent is twice as much as my proposed repayments (even at a 200k loan) anyway, because of my high deposit.

      • fredblogs on 30/04/2022 - 17:19
        +4

        Because the major lenders think you can't afford to repay 200k.
        Why would you pay interest to the bank when you can invest your deposit in an index fund, until you save enough that the banks feel comfortable?

        • rektrading on 30/04/2022 - 17:33
          +5

          It's pretty easy to get a $200,000 loan with a massive deposit.

          There must be something seriously wrong with the loan application for it to get refused.

          • CryssieJade on 30/04/2022 - 19:43
            +1

            @rektrading: If I could get the $200k that I wanted (I was told I could get more than that, literally two weeks before Covid lockdowns in March 2020) - then my repayments would only be $200/week. I was planning on paying double that, to pay it down in 15-20 years.

            My income has been so affected by government payments over Covid that lenders don't even believe I can pay a measly $200/w….

            headdesk

            • witsa on 01/05/2022 - 01:23
              +1

              @CryssieJade: yes, a $200k loan may only be $200/week repayment but have you accounted for the opportunity cost of your deposit if you didn't have to chuck it in a house?

              You said you have a healthy deposit but I'm not sure how much that is. However, I'm guessing if you want to have a child, you'll need at least a 2 bdr apartment which is probably going to cost at least 400k+ so I'm assuming at least $200k in deposit?

              Just as an example, - if you chuck that $200k in an index fund (which is sensible to do at your age), the long term average growth per annum is about 10%. That equates to on average about $20k per year - that's $384 / week. Would you be able to rent a place for the same quality for less than $384 + 200 = $584? There's a lot of costs involved as a home owner too - body corporates, repairs and rates etc.

              Obviously, I don't know your full situation and there's lots of assumptions made in both scenarios but don't discount renting straight away. There's are many cases it is far more sensible to rent - I know we're currently in a period of both rents and house prices going up like crazy but I would say house prices have gone up faster than rent.

              • greatlamp on 01/05/2022 - 07:50
                +2

                @witsa:

                the long term average growth per annum is about 10%.

                Past performance etc etc

                If house prices might drop in response to higher interest rates, what do you think will happen to index funds? The ASX will lose much more than real estate.

                House prices have gone up faster than rent for 20 years. After this long, it is evident that the rental market and the price of property are not connected

                • witsa on 01/05/2022 - 09:01
                  +2

                  @greatlamp: Sure hard to say what'll happen in the short or medium term.

                  But she's only 38, she's got plenty of time to ride though either a house price or stock crash as long as she can maintain her debt.

                  But anyway I'm not saying this is definitely what she should do - just to not automatically go the 'get a mortgage' route cause there's other ways to success and risks in both sides.

                  The bank doesn't make money by not lending money to people. There's usually good reason for them to not do so because no one knows the future. The OP just saying 'i'm stubborn and therefore I'll be fine' is a great attitude but it's not risk mitigation.

                  • greatlamp on 01/05/2022 - 11:44
                    +1

                    @witsa: I think a lot of people are assuming OP doesn't make much money - hence the small loan offered.

                    She is being very cagey about it, but her income is actually very good, just not in the last 2 years.

                    The bank not offering her money is because her income can't be guaranteed, not because she doesn't earn enough. She wouldn't have any issues paying off a loan

                    If she is only 200k off buying a house outright, she probably has around 500k saved. Would you put that much in an index fund when we are headed for stagflation?

                    • CryssieJade on 01/05/2022 - 12:02
                      -5

                      @greatlamp: Thank you for somewhat having my back here 🙂

                      I just don't think anyone needs to know my exact deposit is all. Because no one will believe I've saved that much on my own. How I have saved it, and the sacrifices I have made to get there, are nobody's business, and that's not what's in question here. I didnt want my question to turn into becoming about the amount I have saved and how I have done it. I could put the most frugal OzBargainers to shame 😂

                      • MrFunSocks on 01/05/2022 - 16:19
                        +7

                        @CryssieJade: We want/need to know because it greatly affects any advice. If you've got 500k sitting in a bank account for a "deposit" then another $200k sitting in your "savings" While earning $100k a year then the advice is going to be significantly different to if you have $80k deposit and $10k savings while earning $40k a year.

                        You're deliberately hiding literally the most important details needed for people to be able to give real advice. It comes off as you not actually being legitimate in wanting advice.

                        • CryssieJade on 01/05/2022 - 17:55

                          @MrFunSocks: I really appreciate the very real advice I've already been given, without people knowing those amounts.

                    • witsa on 01/05/2022 - 18:02
                      +4

                      @greatlamp: yeah without knowing about how much she thinks she can make and how big her deposit is, it's impossible to give any meaningful advice.

                      If she has got this 500k deposit she's saved up in 4 years, this means her saving capacity is about 125k per year then there's no point having this discussion - she'll have the full amount in 1-2 years - just save up the money and buy outright. No point lying to the bank or making your life complicated. Even if the prices do continue to go up (debatable), we're talking it'll set her back months not years.

                      On the other hand, she's also said she aims to take 15-20 years to pay off the $200k - so an extra 10k-15k a year - that doesn't sound like a particularly large buffer - that'll probably just pay for day care.

                      The least expensive part of having a child is the pregnancy part and it's very difficult raising a child with two parents let alone one. Not only is it expensive but you'll have basically no time and no sleep.

                      Maybe she has thought this through and it's all covered by all the details she's not sharing but without her saying revealing more, I think we're all just concerned she's naive about the implications of all of these commitments she wants to undertake all at once.

                      • greatlamp on 01/05/2022 - 22:41

                        @witsa: I agree, it isn't easy to give advice with the info we have. I found your advice helpful.

                        My read of this situation is that OP has been earning good money for several years and saved everything.

                        After seeing the price of homes increasing by 20%-30% last year, they have suddenly realised that even if they have to pay a higher interest rate than is fair, it is still better to buy today rather than wait until they can buy the home in cash, and risk falling further behind.

                        • CryssieJade on 02/05/2022 - 19:15

                          @greatlamp: Exactly where I'm at. I don't think I should be waiting to purchase 'in the future'. The future was yesterday, pre-Covid.

                      • CryssieJade on 02/05/2022 - 19:24

                        @witsa: I have thought about a lot, and then this thread has given me some very valuable advice to think about and/or act upon. Very grateful for everyone's responses, even the ones that I didn't necessarily want to hear. I'm not that fixed in my thinking…. You've all got me thinking - in ten different directions.

                        I'm not 25 years old jumping into this decision before living my life well, I'm 38. I wouldn't call myself naive, I have a lot of life experience and I'm intelligent and wise. I am extremely determined though. I have been planning and saving and working on all these things for a while, nothing has been decided suddenly.

                        Covid lockdowns really mucked us all up, a lot. I had these things in motion before lockdowns hit and I'm tired of waiting now.

              • Drakesy on 03/05/2022 - 11:06
                +1

                @witsa: I would not recommend this going into a recession (the second in 3 years)

                Storing money in a house would be stable, no index fund will be returning 10% for a while.

                • witsa on 03/05/2022 - 11:49

                  @Drakesy: maybe it won't, maybe it will.

                  Honestly, these things are extremely hard to predict. People much smarter than you or I try and fail regularly. For example, people had the same thought 3 years ago and it turned out if you'd just kept putting money in the market you would've made a killing. Remember, it's not how you think the market will perform, it's how you think others think the market will perform - even if you do predict that rate raise or that recession, unless you're the only one thinking it, the market has already factored this in.

                  That's why I believe in the whole "time in the market over timing the market" mentality. Find something long term and just never ever sell - in 27 years, when she reaches retirement age, it'll be a nice nest egg no matter what.

                  I would absolutely not borrow any money under her circumstances. So many assumptions - that her business will definitely continue to be successful, that she'll just be able to easily get a full time job, that the pregnancy won't have any complications, that her or her child won't have any medical issues, that there are no large unavoidable expenses, that house prices won't drop, that there won't be another pandemic etc.

                  Any of these things could ruin her. With a child I would take the safer, long term strategic approach. Have the child now because there's obviously a time limit there. Get that stable job cause that's what her family will need. Continue to save and invest, continue to increase her income wherever possible. Once things are stable, go for that house. She can actually have it all, but she might not have any of it if she tries to do it all at the same time.

  • gimme on 30/04/2022 - 21:30
    +11

    What's massive to you may be peanuts to others. Considering you've shared all sorts of personal facts, I'm not sure why you wouldn't share that to provide more context since you're asking for financial advice.

      • gimme on 30/04/2022 - 22:35

        Hmmm ok then, Good luck!

  • StonedWizard on 30/04/2022 - 21:34
    +1

    Could you get a full time job for Monday - Friday and do the photography side on the weekends? You might even find something related to photography as well.

    This would give you another revenue source. In case you can’t run your business whilst pregnant and potentially provide income whilst you’re on maternity leave.

    • CryssieJade on 30/04/2022 - 21:55

      This is definitely a possibility - I have just started looking on Seek to see what's available. My current clients are business hour clients though (not able to be changed to weekends), and I didn't want to cancel existing bookings. Some clients have been with me several years.

      If that's what it comes down to though, I will have to do it. I will have to get new, different clients for weekend work (entirely possible, but would have to rebuild clientele from the ground up again).

  • star-ggg on 30/04/2022 - 22:28
    +1

    I would suggest getting a full time job for 6 months to get a loan. Yes you might lose your existing clients and it will be hard work getting new ones, but it's not like photography demand or your skills are going to disappear in 6 months .

    • CryssieJade on 30/04/2022 - 23:20

      Very true! Thank you for your advice 🙂

  • kaleidoscope on 01/05/2022 - 01:07
    +1

    May not be what you want to hear, but given the list of things you have, your main priorities must be starting family / home loan. For that you will have to make hard decision of a decent full time job at-least until you can get the ball rolling. You can always work on your photography job as a side business for the time being.

    Everyone is different, that is however what I would go about it. Even without the covid / job keeper stuff, is really difficult to get a decent borrowing capacity with just single income.

    Good luck!

    • CryssieJade on 01/05/2022 - 12:17

      They are definitely the two priorities here. Thank you for the luck, with a bit of luck, I just might make it 😊

  • pegasusx on 01/05/2022 - 01:23
    +2

    I'd have to say, the idea of holding down a full time M-F job to obtain a loan + weekend photography work (if you manage to reposition your work to the weekends - Portraits/weddings) - Plus starting a family would be extremely difficult.

    I say this having being a ex-photographer (destination weddings / events) which I choose to give up before I got married and having a family.
    And also having planed for IVF IVM (it's an expensive process even with bulk billing).

    Whilst it was painful to switch back to a corporate career. It was the right one, in hindsight for a few reasons.

    • Stable income - can leverage and service home/personal loans and provide for your family.
    • Weekends - Free time to spend / holiday with your family.
    • Mentally disconnect - from work to enjoy that time with my family.

    You also mentioned that you will start your own business in June, the idea that its a stable source of income is false.
    (Unless your business is positioned to have multiple associate photographers / sales / post processing and admins other than yourself)
    What I mean is if its (creative photography) YOU are the business. So when you pregnant and have your family, you will be unable to generate sales/income.

    Sorry to have to break it to you. But I'd say it's a choice of sacrificing your passion / clientele for your family.
    Not forever, but for a good 6-10 years till they are somewhat independent.

    • CryssieJade on 01/05/2022 - 09:13

      Thank you for your relevant insight! My business has been going for 4 years now, it's not new. But I work for a company between Jan-June, and for myself from July-December. I could definitely outsource the work while I'm on leave. It is a creative business to an extent, but I have photography friends that I can call upon who could shoot in a similar style.

      But I'm also considering the other - I've never had a 'desk job', so that would be interesting…. But I'll do what I need to do, whatever that is!

  • anana-sukha on 01/05/2022 - 05:09
    +4

    I too am 38 and have been self-employed for 10 years in the creative professional services field. I know how bloody hard it is to make your passion your livelihood. The sacrifices I've had to make, I'm sure you've made similar ones too… Now, owning a home seemed impossible for me a few years ago but after much frugal living and hard work, my wife (who works with me) and I were lucky to be able to buy an old apartment last year for 300k (60k deposit). It's not our dream home by a long shot but we're happy to be able to call it our own, and after putting a little money into renovating the bathroom and kitchen, and giving it a lick of paint, it's nicer than any cheap rental we've ever stayed in… Just a half a year before this, we had our first child, and the first year was so hard, especially for the mum (despite how rewarding it all is), and that was with sharing the workload between two people.

    I feel like a lot of what I've recently gone through, you're looking to sign up for too, and while I'm rooting for you, i do worry like some others have already said it'll be hard to juggle running your own business, being a new mother without a partner, plus buying your own home altogether in the near future.

    If i were in your shoes, i would compromise on my first home by getting something i can afford now with the loan amount available to me, on the condition i still had like half a year's of living expenses in savings available after purchase (too risky not to have emergency funds). Have to factor in 6-12months of being out of work once you have the baby, then even after that first year, you may not be able to give your business your all like you are currently. Will you be fine with a reduced income? I wouldn't immediately consider giving up my own business unless i really couldn't stay ahead of all the bills. This compromise on a less expensive mortgage will ensure i dont have as much financial stress once the baby arrives and work needs to be cut down. Alternatively, don't give yourself the financial stress at all of emptying your savings for a mortgage you can only just service, right before having a baby. Make peace with renting for a few more years, so you have a solid amount of cash to fall back on when you're focusing on being a mum. Then once your kid is a little more self sufficient, resume saving for the deposit. House prices aren't guaranteed to go up, nobody's got a crystal ball, so who's to say buying later is a guaranteed terrible idea.

    Having said the above, i know a couple of people who also were self employed, gave it up for just any old job (one at Coles) and they're much happier for it.

    I wish you the very best.

    • CryssieJade on 01/05/2022 - 09:21
      +1

      Thank you so much, and a massive congratulations to you and your family!

      What you have told me is literally everything in my head, and it's set to explode. I've considered everything, I really have. But my head hurts, and I'm tired 😂

      I will definitely post an update in about 6 months when things are well underway. I need to make a finite decision in the next month or two though, in order to start actioning my life and situation. There's so much to think about. I really value your comment and the one above yours, because you can both truly relate. Correct perspectives and all that 🙂

  • Vote for Pedro on 01/05/2022 - 10:34
    +3

    It’s tough isn’t it. Our whole system is geared around a ‘traditional family unit’ and working for someone just to be able to get housing.

    What this sets up is a ‘compliant’ workforce that just shuts up and puts up with crap simply to be able to have a roof over their head.

    Somethings got to give…

    • drprox on 01/05/2022 - 10:40
      +1

      Unfortunately not just Australia. This is any first world country on the planet. One key difference here versus Europe (for example) is the mentality of rent money being dead money and everyone should own their own home. I do acknowledge though our horribly flawed residential leases are part of the problem too though.

      • gromit on 02/05/2022 - 09:35

        yeah many people are unable to see beyond "rent is dead money", not sure if it is bad financial education or just not capable of doing the math. It is still a mantra many people parrot out and in this day and age of negative gearing and likely plateauing or reducing house prices they could not be more wrong. Many very good reasons to own your own home, being cheaper than renting is 'rarely' one of them.

  • drprox on 01/05/2022 - 10:38
    +1

    As others have said non bank lenders (or asset lenders) are likely the only realistic choice here. They aren't subject to the same restrictions banks are (and they'll sell you up no dramas unlike a bank).

    • CryssieJade on 01/05/2022 - 12:06

      Thank you, I will start having chats to a couple. Do you know of any brokers that deal just with non-conventional lenders? Or is this something I have to swindle myself? I don't mind, either way.

  • GuessHowMuch on 01/05/2022 - 10:40
    +1

    I don’t have anything new to add - but I just wanted to wish you all the best! I’m sure you’ll soon figure something out for yourself and the growing fam.

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