How lenders baseline living expenses

I have a suspicion that my estimates of our living expenses are a bit too generous and I'm damaging our serviceability by over-estimating them. I understand that lenders have reference figures, eg a family of two adults and two kids should spend $x per month on food, etc, and I've been told before by brokers that my estimates are always way over what the lenders predictions are.

Does anybody know how I can gain access to these baselines, so that I can reduce our stated expenses to a lower, "more reasonable" figure, but without risking the lender thinking that I'm understating expenses?
 
Yes, You just may be Ozperp!:eek:

Want to PM me and ask me to look at a certain bank or post it here if you like.

They all differ and add this and that based on your dependants.

Regards JO
 
Thank you, both. Richard, from that Genworth one, it looks like $30K or $600 pw for a family of 2 adults and 2 kids will at least get me in the ballpark...

Which is way less than the $910-ish that I calculate is our real living expenses... :eek: Not sure if that's a good thing or not. :D
 
Low living expenses can be a double edged sword.
ANZ refused to process my loan application last year because they said "nobody can live as cheaply as you do".
 
Low living expenses can be a double edged sword.
ANZ refused to process my loan application last year because they said "nobody can live as cheaply as you do".
Yeah, that's why I asked - didn't want to get into that zone. Sounds like I'm comfortably distant from that scenario, though. :D
 
Low living expenses can be a double edged sword.
ANZ refused to process my loan application last year because they said "nobody can live as cheaply as you do".

That's because they've never met you :p :)

They don't realise you are working on cattle acquisitions before donning the big hat ;)

If you'd asked for a new credit card to use for the acquiring trinketts and high status artefacts, they would have bowled you over with enthusiasm :rolleyes:
 
If you'd asked for a new credit card to use for the acquiring trinketts and high status artefacts, they would have bowled you over with enthusiasm :rolleyes:

I have a loan app with NAB at the moment. I settled one with them recently, after which they posted me a gold card with a $10k limit.
I'm just waiting for them to decline this latest application due to the amount of credit limit I have :)
 
Geez, I detest those CC,s. Rob. Totally ridiculous when you don't want or need one and they insist you have one!

Ozp, Looks like your question is answered. Having trouble with my PM's atm. Got the notice you sent one but when I log into Private Messages it's not there! Agh! :rolleyes:

Regards JO
 
Thank you, both. Richard, from that Genworth one, it looks like $30K or $600 pw for a family of 2 adults and 2 kids will at least get me in the ballpark...

Which is way less than the $910-ish that I calculate is our real living expenses... :eek: Not sure if that's a good thing or not. :D
I thought they just decided what you spent and you have no say in it. We make about $700 a week and save at least 50% of that. 2 adults, 2 kids, excluding housing costs/income cos incoming rent covers outgoing mortgages almost exactly. I don't think we could ever convince a bank of this, however. All our 'savings' were channeled to the subdivision and are now going to the builder so we actually don't have any cash or a savings record to show for it, we just have a lot of extremely large debits going out to odd places as we pay off various tradies and utilities. Our next big cash expense will be a boundary fence.

The irony is we need a loan for $100k and in moving, our income will increase by $11k (renting our old house out) and methinks a $100k loan + expenses on a new property costs less than that each year. I still have time to get finance in, they haven't come out to do the soil tests yet so we don't have a fixed price contract.

Our budget got screwed this month as I got a flat, realised all the tyres were beyond legally worn so 4 tyres later we saved somewhat less than we wanted to ... the builder is giving us $1000 off the house for coughing up an initial deposit by the end of the month but has been nice enough to give it to us anyway if we just got the paperwork in by then.

All fun and games.
 
The irony is we need a loan for $100k and in moving, our income will increase by $11k (renting our old house out) and methinks a $100k loan + expenses on a new property costs less than that each year. I still have time to get finance in, they haven't come out to do the soil tests yet so we don't have a fixed price contract.

Our budget got screwed this month as I got a flat, realised all the tyres were beyond legally worn so 4 tyres later we saved somewhat less than we wanted to ... the builder is giving us $1000 off the house for coughing up an initial deposit by the end of the month but has been nice enough to give it to us anyway if we just got the paperwork in by then.

All fun and games.[/QUOTE]

You need to ask a broker who can put all your figures in some software and let you know who will get you finance.

Brokers at the moment get paid by the banks, so its no charge to help you. That's what we are there for.

Regards

Brett Coombs
 
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Our current broker seems to think it is fine just crossing all three properties with CBA - ones on this forum I asked in the past don't. We have way more than enough equity for a 60% lodoc - the three (ok, technically only two) properties are at 30% and 40% LVR, our existing debt is barely into 6 figures and there'll be nothing owing on the land. Total income from all our sources will be around the $65k mark when we move, so we're actually creeping up to being median not low income these days, just need lodoc because banks don't like multiple mixed small income sources. Go lodoc and we can just roll the lot into one number and suddenly they are fine with it. Blah.

I have no idea how long the wait is until we can even apply for finance formally though. Right now our form for depositing our plan has disappeared into the bowels of the bank so we don't even have our land title yet and the builder wants the deposited plan before they go too far ahead with the new house :mad:

If our income sources were more easily provable I think we'd be financially in a much better situation than most. My inlaws can't be earning *that* much more than us but their debt is pushing 4 or 5x ours because they are much 'safer' to lend to in the eyes of a bank. They cry poor, we grumble because we have to save cash for everything.

Anyone think it is worth trying to get an uncrossed loan for the new house, say with ANZ? We could possibly get a stand-alone 60% lodoc without involving the other two properties, depending on valuations and if we can release the land title from the CBA. If we drew down to 60% with the CBA and didnt use the new house as security at all I think the most we could get is $90k but then we'd be in a major accounting mess.
 
I never recommend crossing anything. There are always issues later ( divorce, buying more property etc), Often its better to restructure now than later. The CBA often approve land loans and not construction at the same time. If you already own the land its not a problem, but if you had to settle !
Your correct ANZ is easier at 60% than CBA and for accounting issues its better to keep all loans separate. Not sure on the issues with DP as I thought this was a conveyancing issue. The builder will more than likely be holding off on your construction finance approval from the bank. As they have your title this can be done asap after fixed price contract is handed to them.
 
Not sure on the issues with DP as I thought this was a conveyancing issue.
The bank just has to sign a form allowing us to deposit the plan as they are an 'interested party' and when we went in to get them to sign it they insisted on an ORIGINAL letter from a conveyancer/surveyor saying what we were doing, which we didn't have, so we've left both the form and the letter with them. I have no idea what the problem is - they are signing a form saying we hand over the title to $55k of equity to them, free of charge, and no we don't want a loan with that just now thanks :confused: I am assuming it is just an inane red tape issue - our surveyor is hurrying them along. We thought it would be a 5 second signature jobbie but we obviously hit a stubborn and uneducated bank person. Should have heard the argument over the phone between her and our surveyor, who has done dozens of these and never run into an issue before and sounded pretty peeved.

How hard is it to prise a title out of a bank to go to another bank anyway? They really don't need it to secure anything - we're way under 60% without the land, we paid for all the subdivision fees cash so we didn't increase our loan to get this land, in theory we *should* be able to get them to release it. There's a local ANZ just down the road so we could go there on bended knee and grovel to the manager in person, sans broker, while waving our title and building plans at them.
 
I shouldn't comment anymore on banks. To hand over your title as you have crossed all securities they may re-value the other properties before handing over the title to you. To sign what you are after if you dont get any joy soon, go into your local branch. Ask them what the hold up is.
 
This one shouldn't be crossed - it will be brand new, there's no loan against it, it secures nothing unless they insist on taking the title and using it as security against the other two that are already comfortably secured. I have no idea what the usual procedure is when you magically create a block of land out of thin air that doesn't have any affect on the block you are splitting it from. Our house is worth about $170-200k (loan is about $80k) with or without the extra title - the land on its own is worth $40-55k (I'm basing this on the house diagonally behind ours that recently sold - it was a 2br house and a block of land the same size as ours that sold in a pair for $180k and $55k). This form is a huge value add for us.

I've just spent about an hour on the phone to the bank (our 'local' branch is a long way away which is another good reason not to use CBA) trying to track down this damn form and generally sort things out. They have absolutely no idea what happens to our situation when the extra title appears, so a bit of a waste of an hour. We mailed the form to them 2 weeks ago since they wouldn't take it in person at the Adelaide brach. I want my title already! Preferably without it being requisitioned by a large faceless organisation. They have absolutely no record of the form on the computer. I'm honestly hoping we get the original title unencumbered but I have a feeling the bank is going to keep it and squish our LVR down to single digit numbers and make us jump hoops to free it.

I think the woman at the bank has no clue what the form was for either when she ranted and complained about it having to go up through the home loans cell and everything. She was treating us as if we were BUYING a block of land, not just splitting an abnormally large block into two normal sized pieces. We're not changing our loans at all, just decreasing the size of the land one of our 'securities' is on. She even gave us the patronising "you do know you have to get council approval for this" speech. Yes. We have &^%ing approval. It expires in a month and the bank has held this form for 2 weeks now :mad:

Do normal people get loans for subdivisions or something? Is this why it is so confusing for the bank?

*shakes fist at the CBA*
 
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