Can I still make a purchase when I'm quitting my current job in 1.5 months?

[lamecrocs]

Hi Folks,

I was just made redundant from the current job and I have 1.5 months to the termination date (end of may). Initially I plan to make a purchase of my 1st IP before this year. My question now is am I still be able to go ahead with the plan as my main concern is on the borrowing side.

Here is my situation.
PPOR value: 620k (valued in Sep 2014)
Loan: 370k
Offset amount: 110k (im not planning to use this unless I'm forced to)

In oct 2014, I've got an equity release of 127k from the above PPOR and it's currently staying in a separate offset account. I'm planning to do another revaluation which should have a slight increase in price and make it to a total of 130k+.
Same time last year, I also got a pre-approved loan of 350K. Hence, I was looking to purchase an IP in Sydney with price bracket of 400-450k.

I understand with the pre-approve loan that it's subjected to my employment status. Since I'm ending my employment in 1.5 months, am I still able to borrow the same amount 350k? I do not have issues with repayments.
or how can I still make a purchase in 1-3 months time?

Thanks,
Lamecrocs

 

[Terry_w]

No, without a job I don't think you would find a broker and a lender willing to do this.

 

[lamecrocs]

Terry, what if I found and purchase an IP next week? I'm still under the current employment.

 

[pinkboy]

Terry, what if I found and purchase an IP next week? I'm still under the current employment.

You have to disclose your termination now that it has been done to the lender. Not doing so will be a breach of NCCP.

If you proceed to buy, and you are unable to make repayments because you cant get a job for a while, and the lender puts the pieces of the puzzle together (which they will), you will be in deep do do!

Best you sit on the sidelines until you regain new position.

pinkboy

 

[Terry_w]

Terry, what if I found and purchase an IP next week? I'm still under the current employment.

See Pinkboy's post. Could also possibly amount to fraud. I wouldn't touch it.

 

[cimbom]

Have you considered what would happen if they called your employer to verify your employment?

 

[lamecrocs]

Thanks all for your replies.

So if I found a job in 1 month time and I would be with the new employer. Would it be then difficult to get a loan as well? Or I would need to wait for at least 6-12months

 

[Peter_Tersteeg]

Each application has a question on it asking if there'll be any adverse changes to your financial circumstances in the foreseeable future. If you answer in the affirmative, the lender will almost certainly decline your loan. In this case if you answer no, you'll be lying on the application.

Whilst some lenders will do an employment check, many don't so there's reasonable odds you can get away with it. You should ask yourself though, if this is a wise thing to do?

What will happen if you do get the loan but can't get another job? The risk you're taking by getting the loan through not being honest is quite significant. Defaulting on a mortgage can set you back years, if not decades.

 

[Shahin_Afarin]

Thanks all for your replies.

So if I found a job in 1 month time and I would be with the new employer. Would it be then difficult to get a loan as well? Or I would need to wait for at least 6-12months

Cimbom just posted a similar question - take a look at the replies on that post.

 

[lamecrocs]

Cimbom just posted a similar question - take a look at the replies on that post.

Shahin, if they called my new employer (assuming if I got a new job) in 1 month time, they will say Im a new employee. So how's bank gonna view this situation (new employment)? After I past the probation 3 months with new employer, would this be the best time to purchase?

 

[Shahin_Afarin]

Shahin, if they called my new employer (assuming if I got a new job) in 1 month time, they will say Im a new employee. So how's bank gonna view this situation (new employment)? After I past the probation 3 months with new employer, would this be the best time to purchase?

I hate to say this but it depends.

If the LVR is 80% and your loan is with say CBA or NAB then no worries ascertaining the loan (provided the remainder of application is ok) even if you are on probation. If you use AMP then no they are not going to accept probation even at 80% LVR.

So its dependent on LVR and lender selection.

If the LVR is over 80% then this is tricky and will be very dependent on lender selection. That said it may not fit with any lender at all because it will be dependent on the strength of the application, line of work, history of employment, LVR, application purpose, etc.

 

[lamecrocs]

OK thanks Shahin. I'm currently with CBA and the new loan will be more likely to be with CBA as well. However, Im aiming to have LVR to be around 90% (purely from investment point of view).

I guess I will have to wait until I'm in a new job before purchasing a new IP.

 

[Marty McDonald]

Just need that first payslip and employment letter / contract and you would be away if it is a similar job to the previous one. 90% LVR should be OK as long as the total CBA mortgage insured loans (not total loans) is less than $1 mil.