Nervously awaiting a slim-chance approval :(

Learnings

Learnings

Hi guys.

I've been gathering my papers for the last few weeks and finally got my pre-ap in this morning with bank of queensland.

The thing that makes it a slim-chance is ive been at my current job for 2years as a casual, switched to full-time yesterday.
Last 2 payslips are casual with 50-60hrs a fortnight.
Gota a letter of confirmation with (lower) annual salary and statement of commissions in there.
Atm my bank balance is dismal & I dont have funds to complete.
Getting a deposit of 10k in a few days & awaiting a carsale. Bankman says having funds to complete isnt important now.
St G say I should get preap no worries, but theyll only lend me 200k due to a recent policy change. Im holding off lodging that one until I hear back from Bank of Queensland.

Loan is %100, 230k & I earn 31k pa base + 7kpa comms so its borderline.

Sorry for the rant but im chewing my fingers off waiting for the call!

If I have to fallback to a 200k St G loan im most likely outta the areas ive been looking. Might be time to ask some good brokers off these forums.

nervous noobie signing off
 
Good luck Learnings,

I know how you're feeling. It's tough on the emotions when major decisions that will influence your future are hanging in the balance. :):)
 
This is why, whatever I do next, I do cash. We'd be in lo-doc 60% category otherwise, and I have a new venture now with a 1 month old ABN so I have buckleys to none of getting anything approved anyway even if it is a 10% LVR.
 
Learnings said:
Loan is %100, 230k & I earn 31k pa base + 7kpa comms so its borderline.
Click to expand...

The bit here that really concerns me is the 100% part. There's not much left in 100% loans anymore. I can't comment on BOQ as they don't deal with brokers, but St George doesn't have them any more. If BOQ still does 100%, you may find they withdraw it and your pre-approval won't stack up by the time you purchase.

There are still few lenders allowing 95%, but these are also disappearing fast. You can get personal loans to cover the difference, but with your income, this would eat up a lot of your serviceability.

Family guarantees, gifts from friends or family, etc may serve as an alternate source of a deposit.

Whatever the outcome, I suggest that when you do purchase, make good use of a finance clause.
 
St G %100 ends 5pm tomorrow evening according to them.

Finance cluase will most certainly be used.

BOQ says nothing in the pipeline about going back to %95 but who knows what that means.

A wizard broker commented I should be looking at about 265k with 39k income with St G, but the broker channel is a 4week wait for preap atm apparently, hence going straight to the bank.

I have a %50 chance with BOQ apparently & a %90 chance at 200k with St G.

Im trying not to get too excited until I hear back from BOQ as that determines where to go.

St G seem to not care about savings and purely rely in income. Ive even adjusted my living expenses to the bottom of the HPI.

Mentor said #1 will give me the most greif hehe

Mum & dad are out for equity sharing aswell unfortunatley.

Wish me luck - ill need it !
 
RumpledElf said:
This is why, whatever I do next, I do cash. We'd be in lo-doc 60% category otherwise, and I have a new venture now with a 1 month old ABN so I have buckleys to none of getting anything approved anyway even if it is a 10% LVR.
Click to expand...

No equity to declare as lowdoc income?

Surely theres better than %60lvr around atm?

lowdoc.com.au springs to mind with a number of %80 products on lowdoc

Even %75 LVR no-doc :)

edit: just realised theres a 500k minimum loan amount, that may be unsuitable. They should be able to point you in the right direction :)
 
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How do you declare equity as income? If this house sells, we'll have $60-70k cash, and $50k+$100k equity in two properties, maybe a little more as both are in an area that it still going up strongly and they're now selling vacant land for what we bought our house for. But its just too bloody hard to get a loan - especially a small one - at the moment, hence not wanting to get a loan at all. What's wrong with wanting to work in cash anyway?

The things to do we'd be interested in doing are all in the $50-90k range, so well under the minimum lend banks like to look at. Last time I checked most of the banks had minimum lends in the $50-80k range, we had 'issues' getting our current loans as they were both too small for most lenders so they had to take both of them together or not at all.

If its any consolation to the OP, I got my first home loan back in the dark ages on a letter offering me employment, rather than actual employment. I was still at uni at the time and my income was fairly low and erratic.
 
RumpledElf said:
How do you declare equity as income?
Click to expand...

I want to preface this post by saying this is entirely theorey, I dont want to come across as a knowitall.
From my limited knowledge, you can refinace/draw out equity up to around %80-%90 of the new LVR.

You could then sign the lowdoc "income certification" or whatever that bank calls it.
Use your LOC money (minus the years repayments on it) as your funds to complete/settlement costs. They dont need to know where its coming from, Its up to you how you want to spend your LOC.

That way you turn your asset into cashflow without messy annuities. Sure it costs ya %5.1 of the LOC in interest & a little extra in interest on the loan being lowdoc, but hey, it gets ya in the door. In the door at %80-%95LVR instead of %60. Maximum leverage.

RumpledElf said:
What's wrong with wanting to work in cash anyway?
Click to expand...

Nothing at all. It wasnt meant in a negative manner, being rasied with futures trading, the aim of the game is to leverage as high as safely possible. Cash is obviously very safe, but for the money you tie up you could perhaps purchase another 3+ properties using the above method.

RumpledElf said:
If its any consolation to the OP, I got my first home loan back in the dark ages on a letter offering me employment, rather than actual employment. I was still at uni at the time and my income was fairly low and erratic.
Click to expand...

Hehe I wish I could do that! I had to pull strings and switch FT (normally a 1month process) within 3hours! sounds easy on here but it breaks alot of business rules, as does getting letters of income & comms!

I hope my very limited knowledge & perhaps novice ideas can spark an idea in someone that can help their real life situations, unfortunatley im stuck with theorey at the moment :(

:)
 
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Hiya

The conversion of equity to cashflow isnt an unusual concept, and generally described as Living off Equity.

Has become more difficult for a number of reasons. The primary ones working against the the above theory are

1. Lo doc providers to a decent lvr are almost gone
2. The ones that are still around, some want close to tax rtns anyways, and some wont do cash out

Until 2 years ago the LOE concept worked well as long as you work within well defined market parameters.

On a much larger scale, just one of the reasons that many commercial property trusts have lost so much capital value is because they were using cap growth portions to borrow against, and distributing that as income.

ta
rolf
 
Rolf Latham said:
Hiya

The conversion of equity to cashflow isnt an unusual concept, and generally described as Living off Equity.

Has become more difficult for a number of reasons. The primary ones working against the the above theory are

1. Lo doc providers to a decent lvr are almost gone
2. The ones that are still around, some want close to tax rtns anyways, and some wont do cash out

Until 2 years ago the LOE concept worked well as long as you work within well defined market parameters.

On a much larger scale, just one of the reasons that many commercial property trusts have lost so much capital value is because they were using cap growth portions to borrow against, and distributing that as income.

ta
rolf
Click to expand...

Great post Rolf. If you are going to be living off your assets, then you have to make sure that the METHOD of living off the assets is SUSTAINABLE and not just applicable to a certain period in time.

I again urge memebers to go back to Jan Sommers original books, although they are out dated now, their application is still VERY relevant.
 
Shhhh TF, you'll burst the bubble on people who do creative record keeping :p

I actually had to register a proper ABN properly last week and will have to do proper BAS statements and all that proper above-board cruft as part of the application for some funding (which got approved!) for a business plan I put together. Heck, do that for a few quarters and I might actually qualify for FULL doc. I won't know myself if that happens :eek:
 
If the news is grim from the bank i'll be sure to ask about. Already got a strong reccomendation on a guy based in NSW.

I need to do some due dilligence on some melbourne based brokers, something makes me uneasy about doing it all over the phone (strange from someone who does cold calling for a living?)

I was hoping to hear back today from headoffice but bankman says the easter rush slowed things down. Expect an answer Tuesday. Also been optimising the strategy, 5 IP in 3yrs doesnt look outta the question, even if I "fail" the goal, 5 in 4 years doesnt sound too bad! Im getting a bit bored with properties going up by about $2.80 an hour while im stuck on the sidelines !
 
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