Tricky borrowing capcity question for broker

[mflying]

Hi guys,

Friend of mine is getting few mixed answers from "Retail" broker/bankers.

So here is a situation

Person A income: 65K + super
Person B income: 80K + super
No dependent
currently renting at $400 p.w.
no other debt

Cash balance: 200K

They want to buy block of land for $900K + stamp duty

and

Build $350K house on it.


Is it doable? Serviceability okay?\

Thanks in advance guys!

 

[Terry_w]

It would take too long to work out properly, but I would, at a guess, say no probably wouldn't get thru.

$145k in income.
$1,050,000 needed.

 

[tobe]

Not enough deposit. Most LMI providers top out at $750k loan amounts.

Capacity isnt too bad, a little short, but the main issue is deposit.

Is this the kind of advice they are getting from the retail brokers/bankers?

 

[Jamie M]

Hiya

I just ran the numbers on one of the most generous servicing calcs and it just falls short by around $300 p.m

That's assuming the purchase is in NSW - so stamps and costs will be circa $40k leaving a $160k deposit.

Like Tobe said - it's a $1m+ deal that requires LMI....

Cheers

Jamie

 

[Aaron_C]

Bit short I'm afraid. but as the others have said LMI will knock this on the head with a loan over $1m and with tight servicing. In any case it sounds like a massive undercapitalisation with a house about 1/3 the value of the land...

 

[mflying]

update(just spoke to them):

900k land(purchase) is two adjustment blocks at 450K each

one for live and one to hold.

i think that is where they getting a mixed opinion...

not sure.

thanks everyone for replying..

prop is is country QLD

 

[Terry_w]

They could split these up with different lenders. But there is no income from land so doesn't help serviceability