Low income means can't buy IPs?

B

BigS

Hi all, we are very newbies and have never bought any IPs before. Recently, we have spoken to some property companies. It's those that you have to pay membership fees and they will recommend properties for you, l think they tend to recommend new builds. Long story short, we were told by that few companies that our income is low and can only borrow very little, like 200k only, so they are not interested to proceed further. We are feeling very dejected now.
We have 70k deposit, part cash part equity. Is there really no way that we can proceed with buying IP? It's really all about income? Will speaking to a mortgage broker help? Thanks.
 
BigS said:
Hi all, we are very newbies and have never bought any IPs before. Recently, we have spoken to some property companies. It's those that you have to pay membership fees and they will recommend properties for you, l think they tend to recommend new builds. Long story short, we were told by that few companies that our income is low and can only borrow very little, like 200k only, so they are not interested to proceed further. We are feeling very dejected now.
We have 70k deposit, part cash part equity. Is there really no way that we can proceed with buying IP? It's really all about income? Will speaking to a mortgage broker help? Thanks.
Click to expand...

Your best bet would be to call a broker on SS, there are many good ones on here, I am sure they will reply to this thread soon

Have a chat to them about your financial circumstances and they would be able to tell you what is possible
 
BigS said:
Hi all, we are very newbies and have never bought any IPs before. Recently, we have spoken to some property companies. It's those that you have to pay membership fees and they will recommend properties for you, l think they tend to recommend new builds. Long story short, we were told by that few companies that our income is low and can only borrow very little, like 200k only, so they are not interested to proceed further. We are feeling very dejected now.
We have 70k deposit, part cash part equity. Is there really no way that we can proceed with buying IP? It's really all about income? Will speaking to a mortgage broker help? Thanks.
Click to expand...

Get the hell away from anything that asks you to pay a membership fee.

I doubt you can only borrow 200k unless you're up to your eyeballs in credit cards? Even someone on minimum wage can borrow more than that. Perhaps try talking to someone who has a clue :)
 
It's not all about income but it plays a big part. If you're comfortable, put some figures up on here and I'm sure you will get quite a few replies.

Otherwise, without sounding too biased, chat to a good broker will let you know of all of your options
 
Agreed, check with the brokers here. There are brokers who can find a lender for low income earners. If you have bad credit, might be worth getting that sorted out with a specialist company.
 
I'd be doubtful that you could only borrow 200k based on serviceability. Even at that case, there are still plenty of quality properties that you can purchase (regional or interstate metro) within the sub 200k bracket.

My personal bug bear for people who get told the general 'sorry we can't help' is that they should be told how to improve their situation so the 'no' can become a 'yes'.

Have a chat with a broker who can have a look at your situation and provide you with options. There's plenty of good ones on these forums. :)
 
Hi all, thanks so much for the replies!
Our financial situation is something like this : We don't have any credit card debts, we pay our bills on time. We have a approximate 300k loan on our PPOR. Our pay is about 65k per annum, and was about 81k last financial year because of overtime, but 81k was reduced to 70k due to novated lease of the car. But no overtime recent months.
 
Lots of people invest on low incomes. It does limit what you can afford, but there's quite a few people who have become extremely successful and wealthy despite only having a small income to start with.

Ignore the groups that make you pay membership fees. Whilst they might give you some information, the tend to sell you the property and the all the other services. In my mind they're acting for the seller and the buyer, which creates a conflict of interest.

If you're interested, there's a Somersoft meeting tomorrow (Thursday) night at the Mitcham Hotel at 7:00pm. It's a good way to meet other investor from the forum in a friendly atmosphere. If you can't make it, there's additional meetings published in the 'Meeting Point' section on a monthly basis.

Edit: $65k per annum isn't a high income, but it's not low either. Novated leases destroy affordability. You're probably in a better position than quite a few people.
 
Last edited:
BigS said:
Our pay is about 65k per annum, and was about 81k last financial year because of overtime, but 81k was reduced to 70k due to novated lease of the car.
Click to expand...

1. 65k is not LOW.
2. You have a novated lease on a 65k base - I would have thought that not very tax effective? :confused:

The Y-man
 
BigS said:
We have 70k deposit, part cash part equity. Is there really no way that we can proceed with buying IP? It's really all about income? Will speaking to a mortgage broker help? Thanks.
Click to expand...

Hiya

Different lenders have different methods of assessing borrowing capacity. There's also other ways to improve it - removing/reducing debt is a good start (not sure if that's applicable to you or not).

Cheers

Jamie
 
BigS said:
Hi all, we are very newbies and have never bought any IPs before. Recently, we have spoken to some property companies. It's those that you have to pay membership fees and they will recommend properties for you, l think they tend to recommend new builds. Long story short, we were told by that few companies that our income is low and can only borrow very little, like 200k only, so they are not interested to proceed further. We are feeling very dejected now.
We have 70k deposit, part cash part equity. Is there really no way that we can proceed with buying IP? It's really all about income? Will speaking to a mortgage broker help? Thanks.
Click to expand...

Hey BigS.

A broker will really help you know where you stand and help you come up with a plan to help you acheive your goals.

There's plenty of great brokers on here, i'd suggest speaking to Peter - he's Melbourne based, experienced and a finance guru.

Cheers,
Redom
 
The Y-man said:
1. 65k is not LOW.
2. You have a novated lease on a 65k base - I would have thought that not very tax effective? :confused:

The Y-man
Click to expand...

Yes, we now realised it's not a good idea to get novated lease on the car after all :( the lease is only going to end in about 2 years time, guess we have to tough it out then :(
 
65k income should translate into more than $200,000 in todays low rate environment.

Will depend on number of dependants, other debt you may hold, etc.
 
How much would it cost to get rid of the lease?

That will bump up your servicing but will also eat into your deposit.

Cheers

Jamie
 
Speak to a broker first absolutely :eek:
Peter T, Jamie, Rolf Latham, Shahin etc- look for the longtime experienced ones on this forum and state is irrelevant really. (apologies to all those other great brokers I'm missing... too lazy to include you all!!)
 
Peter_Tersteeg said:
Lots of people invest on low incomes. It does limit what you can afford, but there's quite a few people who have become extremely successful and wealthy despite only having a small income to start with.

Ignore the groups that make you pay membership fees. Whilst they might give you some information, the tend to sell you the property and the all the other services. In my mind they're acting for the seller and the buyer, which creates a conflict of interest.

If you're interested, there's a Somersoft meeting tomorrow (Thursday) night at the Mitcham Hotel at 7:00pm. It's a good way to meet other investor from the forum in a friendly atmosphere. If you can't make it, there's additional meetings published in the 'Meeting Point' section on a monthly basis.

Edit: $65k per annum isn't a high income, but it's not low either. Novated leases destroy affordability. You're probably in a better position than quite a few people.
Click to expand...

Thank you Peter! We will definitely try to make time to attend!
 
BigS said:
Hi all, thanks so much for the replies!
Our financial situation is something like this : We don't have any credit card debts, we pay our bills on time. We have a approximate 300k loan on our PPOR. Our pay is about 65k per annum, and was about 81k last financial year because of overtime, but 81k was reduced to 70k due to novated lease of the car. But no overtime recent months.
Click to expand...

We were earning around 80k and built a portfolio of 4 houses worth around 1,400k. You definitely should be able to buy.
 
And thanks very much to all for the replies and the suggestions of mortgage brokers! I am starting to feel a beacon of hope with all the replies :)
 
You must log in or register to reply here.

Similar threads

W
Low-doc loans - how easy to get?
2
Replies
27
Views
4K
MTR
MTR
M
Refinancing Help - Complex Structure?
2
Replies
24
Views
4K
Terry_w
Terry_w
D
refinance IP loan with overseas income?
Replies
17
Views
2K
Shahin_Afarin
Shahin_Afarin
W
Help a Noob
Replies
5
Views
2K
Shahin_Afarin
Shahin_Afarin
N
Structure
Replies
5
Views
2K
Terry_w
Terry_w
Back
Top