Is Youth Allowance taken into account for loan serviceability?

[kaiseriqbal]

Hi all,

I was interested in a purchasing a positively geared property, and since I am at uni now, I get youth allowance.

What i'm interested to know is if the banks take into account youth allowance in calculating loan serviceability? If so, which lenders take into account youth allowance in their serviceability?

My other forms of income are from part time work and I also receive rental income from my other investment property, which is also positively geared (yield of 9%).

I'm really eager on purchasing another property before I finish uni in five months time, when I have a $60k p.a. job lined up (senior position at the place I am working in now).

Thanks for your help

 

[Bradsdad]

not that I'm aware of and I would say a definite NO is LMI is involved.

 

[Rolf Latham]

Hi Kaiser

Pre July 1 not much chance because lenders dont like a large chucnk of non rental income to come from benefits.

Post July 1, not a chance really because the Fed Gov Legislation says that any loan would be unsuitable for you due to capacity to repay.

While a property at 9 % looks like its pos geared, the reality is the way lenders look at these things, you need 12 to 14 % to be revenue neutral.

ta
rolf

 

[kaiseriqbal]

Thanks for clearing it up. Will have to wait till November till I start working full time then.

Btw, what other changes occurred as a result of the new gvt legislation and which bank is the best for serviceability for a low income earner?

I also have the option to start working full time at the place I am working part time at now. If I can get a letter from my manager on the company letterhead, will that be enough to prove income, along with the payslips I have whilst working part time?

 

[tobe]

You would need to get more specific advice on your own situation from a broker direct, but if you could keep the lending below 80% of the properties value you might find a lender who would consider your income as it stands now. If your only income was Austudy, that would be a diferent story, but if you had austudy, a part time job (especially if it was in the field you are currently studying) and proposed rental income, it may well have a chance of being placed successfully with a lender.