no job = no loan ??

[123]

Hi everybody, a fellow member here recommended I join so I can ask my question. I resigned from my job 5 years ago so I could travel the world. I've had a blast and realized I can live off my rent which is about $38,000 a year before tax.

I'm now back in Sydney and was planning to settle down but I've decided I don't want to work anymore and will continue my travels. I'd like to buy one more property but my broker said it's impossible to get a loan without an income. Is that true? I have about $900,000 equity but no job. Can I get a loan?

 

[nhg]

I'd be curious too, i'm in a similar situation.

Question though, if interest rates rise, will you still be able to live off that income?

 

[123]

Question though, if interest rates rise, will you still be able to live off that income?

If I can get a loan i'll make sure my investment can pay it's way because I'm sure interest rates will rise from here on. My current situation is I have 3 properties worth about $1 million and have a loan of $70,000. I also have about $100,000 in cash.

 

[Of The Vultures]

Doesn't your rental income count?

 

[123]

Doesn't your rental income count?

Yes but I don't think it counts for much. How much can I loan with $38,000 rental income?

 

[Aaron_C]

Yes but I don't think it counts for much. How much can I loan with $38,000 rental income?

Not much....maybe max $150k?

 

[geoffw]

Me too!

I'm looking into topping up my super and getting a super loan fwiw

 

[123]

Not much....maybe max $150k?

Aaaw I can't do much with that

Can I sign a stat dec and get a no/low doc loan?

 

[Rixter]

Although you have sufficient equity Im not sure how much if any loan funds you may already have available to structure a cashbond for increasing DSR.

Do you have any already approved funds?

You could also use your $100k savings to structure a cashbond too.

Ball park, a cashbond can increase your DSR borrowing power to the tune of 400% the CB purchase price.

 

[Rolf Latham]

Id vote no loan without some form of smoke and mirrors

ta
rolf

 

[devank]

You could also use your $100k savings to structure a cashbond too.

Sometime ago Rixter explained how the cashbond works. That could be useful.

 

[tobe]

There are still low doc loans available for self employed property investors. However with a current rental income of $38,000 and the likely rental from the new purchase, perhaps you dont need to go lo doc?

 

[luckyone]

Did I just read about you in the paper today?

http://www.news.com.au/travel/trave...try-in-the-world/story-e6frfqer-1226741066669

 

[Aaron_C]

Lo Doc loans are pretty much dead in the water these days. I've hardly written any.

 

[Mick C]

Lo Doc loans are pretty much dead in the water these days. I've hardly written any.

Quite the opp for me -Low doc is a booming business

However def a lot harder to write and takes x 2 as long compare to a full doc loan as we require the file to be strong from a credit + income point of view with good deposit and excellent "borrowers characteristics".

Regarding OP -Loan amount as mentioned will be low; how low depends on other financial details; but can be done as a normal full doc loan with the use of 2 tax returns to show consistent rental return.

 

[eternit]

Hi everybody, a fellow member here recommended I join so I can ask my question. I resigned from my job 5 years ago so I could travel the world. I've had a blast and realized I can live off my rent which is about $38,000 a year before tax.

I'm now back in Sydney and was planning to settle down but I've decided I don't want to work anymore and will continue my travels. I'd like to buy one more property but my broker said it's impossible to get a loan without an income. Is that true? I have about $900,000 equity but no job. Can I get a loan?

Is that $38000 before or after your property expenses e.g. council rates/water rates etc

 

[Mick C]

Is that $38000 before or after your property expenses e.g. council rates/water rates etc

Well im hoping it's after mortgage repayments lol...

 

[Colin Rice]

Quite the opp for me -Low doc is a booming business

I do a few as well and find they go through quicker if everything is packaged correctly with the application.

Back to the OP;

Banks require two big boxes to be ticked;

1. Security in the form of cash or equity which you have
2. Serviceability, that is proof of income to repay the loan/s. Where you may fall short

Cheers.

 

[scha9799]

Do you mind if I ask why do you want to buy property for ? for long term buy and hold ? or short term add value and sell ?

If you want to short term add value sell, you can joint venture with some people have stable income job or ask for vendor finance to get the property a cross the line.


50% of something is better than 100% of nothing.

 

[123]

Although you have sufficient equity Im not sure how much if any loan funds you may already have available to structure a cashbond for increasing DSR.

Do you have any already approved funds?

You could also use your $100k savings to structure a cashbond too.

Ball park, a cashbond can increase your DSR borrowing power to the tune of 400% the CB purchase price.

I've only got my existing loan ($70k balance) with CBA which i'm trying to pay down as quick as I can. I was silly and paid off 2 other loans when I sold a place 2 years ago. In hindsight I should have kept them open but i'll do it with this remaining loan. Thanks for the cashbond suggestion which I'll read up on but it sounds dodgy.

There are still low doc loans available for self employed property investors. However with a current rental income of $38,000 and the likely rental from the new purchase, perhaps you dont need to go lo doc?

I thought I might be able to borrow more if I went no/low doc. Aaron reckons I can only borrow $150k max on my current rental income which I assume is a full doc loan.

Did I just read about you in the paper today?

http://www.news.com.au/travel/trave...try-in-the-world/story-e6frfqer-1226741066669

I find this hard to believe but if true then fair play to him.

Is that $38000 before or after your property expenses e.g. council rates/water rates etc

It's about $38,000 gross.

Do you mind if I ask why do you want to buy property for ? for long term buy and hold ? or short term add value and sell ?

If you want to short term add value sell, you can joint venture with some people have stable income job or ask for vendor finance to get the property a cross the line.


50% of something is better than 100% of nothing.

I'd like to buy another one for the extra rental income. The $38,000 is ok but having an extra place renting for ~$350-400pw would be ideal for me. I don't need a high income and can live comfortably on about $100 a day.

I'm also open to the idea of a joint venture with someone who has a stable income but I'm not sure how it works in reality... do I put up the security and the other person applies for a loan because they have better serviceability? Send me a message if anyone is interested in this.

Thanks for your comments Mick.C and FMS. I'll get in touch with a broker here and see if any of them can get me a no/low doc loan if that means I can borrow more.