Home Loan Help Please!!!

[SydneyBoom]

Hi, I am new to this forum and I found some really knowledgeable people across the board. I will be very happy to have some new ideas, meet some new people and get some professional help from some of you guys.

I am in pursuit of a good value home loan deal. I believe its out there waiting for me but I have no idea where exactly it is. I need a helping hand from someone to connect me with that loan. Below are my details which I think describes my financial situation slightly. Also further below my personal phone and email details can be found...

Im a discharged bankrupt.
Discharged April 2014.
I want to buy a 2 bedroom unit in Sydney.
Unit price is 600K.
I have savings totaling about 160K.
I have 25K worth of Gold.
Im a full time PAYG making 50K pa.
I am with last employer for 2 years.
I have my wages deposited into my account weekly.
I have my pay slips available.
Im single.
I have no kids.
I live with my parents.
Unit will be investment property.
I have no car.
No debts.
No credit cards.
No loans.

I respect everyone's time therefore I want to let you know I am not interested in any interest rate over 6% pa or any penalty fee's totaling more than 5K.

As I had a pre approval with pepper home loans, I do not find their offer reasonable for my situation.

I need maximum 80% home loan with an option to
-Early payment
-Good interest rates
-Offset account (I believe this is a good option)?
-Reasonable penalty fees for my situation
-Option to say goodbye to them and meet other lender with better deal (because my bankruptcy will be over completely out of my credit file VEDA I believe by April 2016)

If you can help me in any way,
Please sms or call me on my mobile 0405253369
or email me at dennisozyurt@hotmail.com

Thank you for your time!

Dennis

 

[SydneyBoom]

Extra Info

Pepper Home Loan Offer was

6.85%Pa If I am not wrong
1.25 fee on top of how much I borrow.
If I borrow 465K I need to pay them 6K straight away as a penalty.
Also there is no guarantee of changing lenders and I might be paying 6.85% pa interest until I find someone else willing to take my mortgage over from peppers in the future which is unclear and worries me a lot.
Also many (actually 99% units sold on auction) I am scared to lose my 10% deposit if I bid and win on auction as my situation is not easy because of bankruptcy I might not be fully approved for the loan...

I had a lot of question marks, my pre approval was only for 30 days and it expired on 1st April 2015. Since than I lost interest in Sydney housing market and now thinking of buying something outside Sydney off the plan maybe to beat Home Loan nightmare as I have 10% for any property and I believe in about 1 or 2 years my loan obtainment will improve...

Also I need insights for off the plan units, in Sydney, Melbourne or Brisbane, maybe even in Perth or Adelaide... I will be happy to join any seminars or chat to anyone who is able to tell me how good is to invest in off the plan units.

Thank you guys in advance!

 

[albanga]

Hi Dennis,
One of the experienced brokers will be along to help you shortly but bankruptcy aside on your current salary that would leave you in a non ideal cashflow position.

You would require a 440k loan (more if your 600k does not include closing costs). This could be reduced with the gold but even then on 50k how could you service this debt?

Secondly if your after your first property then why Sydney? Sydney is the hottest market in Australia which a lot of people have tipped to be at the peak. Why not somewhere tipped for more growth like Brisbane where you can also get a much lower entry cost.

 

[DaveM]

Geez 6.85%, talk to a good broker instead. Thats robbery

 

[albanga]

Regarding OTP I am very anti it.
- Prices are inflated by developers
- if valuation on completion doesn't come in then you need to foot the difference.
- no value add potential
- if you want to sell on completion then your like doing it along with many others meaning a reduced price
- paying a premium for new

I could go on with reasons I don't like it but it also can be successful. Risk versus reward and personally I believe the risk far outweighs the reward.

Just my cents, if I were you I'd be considering continuing to save my cash, in the meantime I would spend ALOT of time educating myself, read in here every day, buy books and magazines and just learn.
During that time the default will clear up, MAYBE the market will get under control and when all that aligns you will be in the best possible position to make the correct purchase.

 

[SydneyBoom]

Geez 6.85%, talk to a good broker instead. Thats robbery

Thats how I felt and just did not go ahead.

Also I wasnt able to find a suitable unit to buy therefore I did not go ahead with pepper home loans.

Thanks for your reply.

 

[Peter_Tersteeg]

The problem here is the ex-bankrupt element. Mainstream lenders wont touch this whilst it still appears on a credit report. This sort of scenario falls solidly in domain of non-conforming lenders; those that lend to people with credit problems. This means the likes of Liberty, Pepper, Bluestone and a few others.

I'm certainly no expert in this type of lending, but my limited exposure suggests that with an 80% LVR the fees and rates already indicated by Pepper probably aren't out of character for this type of loan. If the LVR can be reduced further, the loan will certainly get cheaper in all respects.

 

[SydneyBoom]

Regarding OTP I am very anti it.
- Prices are inflated by developers
- if valuation on completion doesn't come in then you need to foot the difference.
- no value add potential
- if you want to sell on completion then your like doing it along with many others meaning a reduced price
- paying a premium for new

I could go on with reasons I don't like it but it also can be successful. Risk versus reward and personally I believe the risk far outweighs the reward.

Just my cents, if I were you I'd be considering continuing to save my cash, in the meantime I would spend ALOT of time educating myself, read in here every day, buy books and magazines and just learn.
During that time the default will clear up, MAYBE the market will get under control and when all that aligns you will be in the best possible position to make the correct purchase.

Hi Albanga

Thank you for your reply!

As you mentioned I am still learning a lot about real estate.
It will be my 1st home purchase and I dont mind its being in Sydney or Melbourne, as long as its a good buy along with good mortgage I will be happy to go ahead.

I am open to all free or paid property seminars where I can learn more about things like OTP, land and home package etc...

Many thanks again.

 

[Phiber]

Honestly, the best place to learn is this forum. Take some time to read it and do some research on here: it takes a while to learn how the others are doing it and the traps to avoid, so it's urgent for you to pause and not rush into this.

Also beware of seminars - they are often promoting their own products and you can get biased advise there.

 

[SydneyBoom]

The problem here is the ex-bankrupt element. Mainstream lenders wont touch this whilst it still appears on a credit report. This sort of scenario falls solidly in domain of non-conforming lenders; those that lend to people with credit problems. This means the likes of Liberty, Pepper, Bluestone and a few others.

I'm certainly no expert in this type of lending, but my limited exposure suggests that with an 80% LVR the fees and rates already indicated by Pepper probably aren't out of character for this type of loan. If the LVR can be reduced further, the loan will certainly get cheaper in all respects.

Thank You Peter!

I would be very happy to see any good home loan offers, (better than peppers). If not I will be waiting anyway, but I will need to learn more about real estate to make a much healthier decision.

 

[SydneyBoom]

Honestly, the best place to learn is this forum. Take some time to read it and do some research on here: it takes a while to learn how the others are doing it and the traps to avoid, so it's urgent for you to pause and not rush into this.

Also beware of seminars - they are often promoting their own products and you can get biased advise there.

Hi Phiber

I will be learning a lot from this forum for sure!
Also seminar wise I am open to them, I have been to one couple of months ago in Sydney.

The idea was to buy middle of the market brand new houses and multiply over the time. Daimien Patterson his name if some of you can recall it.
Well I believe it can be achieved but I havent signed anything with them, It gave me a rough idea about their way of investing in real estate and again I think its reasonable. With only challenge finding the positively geared properties. The idea is to find positively geared brand new middle of the market houses, not units and not commercial property for loan purposes and not unit because of high strata fees and other corporate fees.

I need to be open minded as property market is very competitive and I can not afford not to look at every option.

Hopefully I will sign after Im 100% sure its a good deal!

All the best!

 

[tobe]

Some mainstream lenders will consider ex bankrupts, to 80% LVR after they have been discharged 2 years. As you have only been discharged 1 year, I doubt it will be possible.

How did you go bankrupt? If there is a good story, it may be possible to find an exception to a lenders policy.

 

[bobby85]

Since no one has mentioned it yet, why does your first investment property need to be 600k? There are plenty of stock on the market in the sub 400K bracket and even lower that are suitable for first IP ownership. This obviously will mean outside of Sydney.

 

[albanga]

Since no one has mentioned it yet, why does your first investment property need to be 600k? There are plenty of stock on the market in the sub 400K bracket and even lower that are suitable for first IP ownership. This obviously will mean outside of Sydney.

I had mentioned this already Bobby.
I personally believe a 600k lend on a 50k PA salary is extremely risky. What about if the property becomes vacant? How long can you afford to cover the payments without rental income and keep in mind you will have no savings as you would have used it all on the deposit and closing costs.

For me personally your also buying in the hottest market in Australia which surely given lender tightening is nearing the very peak.

I would be starting smaller, looking in a growing market at 400k and having a cash buffer. Also it means if you are desperate to get in now and need to use a pepper or liberty then you have a much better LVR and will not be paying the high interest on such a large amount.

 

[Kinnon Bell]

There's a few lenders who will look at you, but one particular mortgage manager who is pretty good in this space which is Homeloans Ltd. Depending on your exact circumstances you should be able to get a rate under 6% and *maybe* under 5% depending on a few things.

I think, like others have said, you need to take a bit of a step back at the moment and come up with a strategy for your investing and then go from there.

FWIW, Pepper are trying to proactively retain their customers. They used to accept that once someone's credit history cleared up they would refinance out but now they're becoming more competitive in the 'mainstream' lending and once you have a clear credit history they will review and look to reduce your interest rate on your loan.

 

[Marty McDonald]

2 years clear with demonstrated savings capacity and I think your back in mainstream land. You gotta realise as well that a couple of years ago 7% was a good rate. Perception is reality. The $6k fee is a killer though.

 

[SydneyBoom]

Some mainstream lenders will consider ex bankrupts, to 80% LVR after they have been discharged 2 years. As you have only been discharged 1 year, I doubt it will be possible.

How did you go bankrupt? If there is a good story, it may be possible to find an exception to a lenders policy.

Hi
It was a credit card and getting another one to close the other one off etc.

My offer to banks were very reasonable I think, about 50% to settle but I was not be able to settle it. It was rejected. All they ask if you can do close the account pay us in full. But whats the point of closing one and getting default with other one? My mistake I think was to try all by myself. I had to ask someone to help me out in the process to negotiate etc on behalf of me.

Now Im paying the price accordingly...

 

[Terry_w]

Hi
It was a credit card and getting another one to close the other one off etc.

My offer to banks were very reasonable I think, about 50% to settle but I was not be able to settle it. It was rejected. All they ask if you can do close the account pay us in full. But whats the point of closing one and getting default with other one? My mistake I think was to try all by myself. I had to ask someone to help me out in the process to negotiate etc on behalf of me.

Now Im paying the price accordingly...

Credit card problems are common. I had one client with $200k on credit cards and she ended up bankrupt too. I have also negotiated with credit card companies to pay as little as 30% of the debt owing. Some were keen, others were not keen, but accepted higher %.

 

[SydneyBoom]

Since no one has mentioned it yet, why does your first investment property need to be 600k? There are plenty of stock on the market in the sub 400K bracket and even lower that are suitable for first IP ownership. This obviously will mean outside of Sydney.

Hi

My idea is to get a 2 bedroom in a good location. Around Eastlakes Mascot Botany area. Close to Sydney CBD and still reasonable in price. Well, looks like its not really the case at the moment as sales of older 2 bedroom units with no LUG sells for about 600K and with LUG for 650K and over its a crazy market.

I have looked at ORAN PARK as well. Land and house package, they have gone out of my price range as well. Decent land and house package with completion at the end of 2016 sells for about 650 to 700K to start with.

Getting something for 400K? I have no idea if this is a good idea?
Ups and downs of this, location etc...
Remember I am a crawling baby trying to learn and I might be listening some non educated people about real estate

Hopefully I will be able to stand up and make a good choice!

Thank You!

 

[SydneyBoom]

There's a few lenders who will look at you, but one particular mortgage manager who is pretty good in this space which is Homeloans Ltd. Depending on your exact circumstances you should be able to get a rate under 6% and *maybe* under 5% depending on a few things.

I think, like others have said, you need to take a bit of a step back at the moment and come up with a strategy for your investing and then go from there.

FWIW, Pepper are trying to proactively retain their customers. They used to accept that once someone's credit history cleared up they would refinance out but now they're becoming more competitive in the 'mainstream' lending and once you have a clear credit history they will review and look to reduce your interest rate on your loan.

Hi Kinnon

I do realise this is all business transaction and past personal issues shaping my current ability to obtain residential home loan.

As much as I love to get a unit for my future, I am deeply concerned about huge mark ups on my proposed home loan.

Yes they might and possibly they will decide to lower my loan percentage as long as I behave and pay on time.

The real deal is upfront they are burning all bridges and making all their profits to start with I dont get any benefits of getting the loan with them in my opinion.

Some might argue that I am wrong as market moved higher and Australia never had real estate recession and will never have one in the near future. I am afraid of losing my savings by signing up to a deal with Peppers. As long as my money is in the bank at least its not wasted.

I hope to see the light at the end of the tunnel.

Thanks