Bank finance approval Employment/ Income check Query

[Samwise]

I'm trying to plan how/when to get finance for our first IP.

Can anybody tell me if, when banks check previous 3 months income for finance approval, these have to be with the same employer? i.e. can it span the time when you changed your job?

Additionally does it matter if the previous 3 months being checked include some portion of a probationary period for a new job?

Cheers

 

[Rolf Latham]

Depends on the LVR, but most lenders wil want pays less than 4 weeks old

ta
rolf

 

[Samwise]

Thanks Rolf….

Re-financing PPoR to release equity up to LVR of 80%

So they typically only want 4 weeks pay, not 3 months?

 

[Aaron Sice]

mate - some lenders want 6 months payslips form the same employer.

 

[tobe]

Each lender has diferent rules. They dont want to see 3 months of payslips, but most do want you to be 3, 6 or 12 months with the same employer. They may or may not ask for proof of this with a group certificate, or employment contract etc.
If you have been less than the banks minimum employment criteria, you can usually get it past if you have 2 years in the same industry, again with proof like employment contracts group certificates etc.
Each lender has diferent rules, some wont budge on 3 months, some will do a loan while you are in probabtion, befroe you get the first pay slip, just with the employment contract, straight out of school (a newly employed lawyer for instance etc).

 

[Samwise]

OK thanks for the info...

I've spent a good chunk of this year unemployed, but been working the past couple of months and start a new salary role (same industry, new company) on >$100K...

Any idea which banks will be easiest to deal with or do i just have to speak them individual to suss them out?

Cheers

 

[tobe]

Speak with a broker, there are quite a few on here if you like. They will be happy to give you an idea of which banks will look at your income and how much you can borrow. You can then if you like make an appointmnet for them to help you with the application, or you can apply with that bank yourself. I would recomend using a broker to help with your application, because although the banks policy may be x, the banker you get at the branch might interpret it y.
Good luck!

 

[LoanFinder]

The only issue as I see it is if you are on a probationary period. Some lenders will not allow income to be accepted on probation, but others will.

If you have similar experience in the same industry, then this will lessen the risk for the lender if they are concerned by probation.

If you are not on probation, then no issues. Use your base income and calculate your maximum income accordingly.

Best of luck.

 

[Samwise]

OK thanks…

I'll speak to my current broker again and see what he thinnks… last time we spoke (about a month ago - before I had this job offer) he wasn’t too hopeful

 

[Samwise]

Well, spoke to my broker about

a) releasing equity from our PPoR into a LOC (which we want to use as the 20% deposit)
b) finance for the other 80% with another bank

He said that our current bank, bankwest, will not allow me to do a) until my 3 months probation is up... and in any case b) would be the same

So, unless we can find an IP and get a settlement date of 3 months agreed (unlikely), we're stuffed for the moment

 

[LoanFinder]

So they answer from your broker was nothing able to be done until your 3 month probation is up ?

If your LVR is less than 80%, I cannot see based on what you have advised that another lender would be able to approve the loan.

As mentioned before, there are lenders that will allow your income to be used before the 3 month probation is up. Particulary if you are working in the same industry.

You would need to refinance your PPOR from Bankwest if they cannot assist, so just check out if there are any early repayment fees / penalties to make sure you include them in your calculations.

 

[Samwise]

So the answer from your broker was nothing able to be done until your 3 month probation is up ?

Yup

If your LVR is less than 80%, I cannot see based on what you have advised that another lender would be able to approve the loan.

"would" or "would not"? Sorry, confusing statement...

As mentioned before, there are lenders that will allow your income to be used before the 3 month probation is up. Particulary if you are working in the same industry.

How do I find them?

Cheers for your help

Sam

 

[LoanFinder]

"would" or "would not"? Sorry, confusing statement

Sorry , meant would not.

Let me clarify.

I think any lender that will accept your income will allow you to refinace your O/O property and alow a loan for your investment property.

Clearly Bankwest are not one of those, so suggest you talk to a MB about who will do that for you.

 

[Spectre]

Bankwest wont, cba probably will, even with LMI/LDP......... same money....

 

[bradje]

I'll speak to my current broker again and see what he thinnks… last time we spoke (about a month ago - before I had this job offer) he wasn’t too hopeful

Hi Samwise,
If u want to learn, may i suggest that you listen to the broker, but also do your own leg work and get into the Banker's offices. Make sure u are actually talking to someone who can make decisions, and not the "guy behind the counter".
One reason for this approach is that when (not if) you find a good bank guy, they can be really, really helpful in the future. same applies to brokers of-course.

Sometimes having a property-investing accountant can be helpful and get their advice on which bank/branch/person to chat to.
It can pay quite good dividends to do it yourself and the understanding of the process will increase dramatically.
Once you have met with banker no.5 or 6, things will get easier.
Cheers,
JB

 

[Samwise]

Yes, have thought of bypassing the broker a few times... i might pay a visit to a couple of the banks.

Pity I havent been with bankwest for very long, still on a honeymoon rate for the next 11 months so i'm sure there will be exit fees

 

[bradje]

Yes, have thought of bypassing the broker a few times... i might pay a visit to a couple of the banks.

Pity I havent been with bankwest for very long, still on a honeymoon rate for the next 11 months so i'm sure there will be exit fees

Sorry I don't understand why bankWest (CBA) would be a problem. Just a matter of getting to the right person.
Sometimes the Mobile Lenders from the bank are very good. The ones I have met, in the main, seem to know their stuff.
Might be worth while setting up a meeting with a BankWest Mobile Lender.

JB

 

[LoanFinder]

Pity I havent been with bankwest for very long, still on a honeymoon rate for the next 11 months so i'm sure there will be exit fees

Ouch, maybe give Bankwest a call and find out what that fee would be first, it may stop you from considering refinancing at the moment.