Hi rolf, and thanks for your input.The whole reason for my thread is to make some sense of my position, because cba dont see it the way it should be.like taking serviceability etc. Ill lay out my position .ppor value $750k,loan$320k-ip 1value $430k loan $294k-ip2value $450k loan$394k.Income combined 1700 + 350+450. we have outlayed $ 60k towards next ip,which means will need to borrow about $475k . The income will be $600pw at least. So adding this all togeather ,why wont cba come to the party. Do Ineed to offload something?
Why Is 30%+ Of Household Income Considered Mortgage Stess
- Thread starter atsim
- Start date
Hi atsim,
Are you counting the 350 + 450 from your rental income? I believe that banks only count 70% of rental income when making their calculations (I could be wrong). But I feel your frustration, I went through the same thing trying to get a loan...and was frustrated that FHB were able to get the same amount as I, with no equity, no real savings, and just the government cashout, and I was struggling to get approval with what seemed like a whole lot of leverage!
I suggest trying different lenders because their serviceability criteria will vary
Are you counting the 350 + 450 from your rental income? I believe that banks only count 70% of rental income when making their calculations (I could be wrong). But I feel your frustration, I went through the same thing trying to get a loan...and was frustrated that FHB were able to get the same amount as I, with no equity, no real savings, and just the government cashout, and I was struggling to get approval with what seemed like a whole lot of leverage!
I suggest trying different lenders because their serviceability criteria will vary
very true ... years ago i worked with a lady who, her and hubby, were on same income as me and ex.
we were comfortable (certainly not rich) but they were paupers. their's all went on booze, ciggies and weed.
....but were they happy ???
i don't think so - that's why they spent all their money on ...
I am currently sitting at 30.83% and i think i live very well.
Im single (well defacto. living seperatly), went to america last year, going to Fiji next month, bought myself an expensive puppy few months ago, Spent stupid amount on modifying my car, and going to Thailand in September and all through my savings, and the banks wont let me buy another IP as they think im already overextending my affordability....Both IPs are Cash flow positive
the 3 banks i have talked to said they want me to get this down to 20% before i get another IP.
Im single (well defacto. living seperatly), went to america last year, going to Fiji next month, bought myself an expensive puppy few months ago, Spent stupid amount on modifying my car, and going to Thailand in September and all through my savings, and the banks wont let me buy another IP as they think im already overextending my affordability....Both IPs are Cash flow positive
the 3 banks i have talked to said they want me to get this down to 20% before i get another IP.
expect it to get worse for many .the credit freeze that's taking place now, aint going to make loans any easier to get .
its nice to hear everyone doing so well but do spare a thought for many who are not as their work hours been cut of job lost .cost of everyday living not getting any cheaper only the discretionary purchases are .
its nice to hear everyone doing so well but do spare a thought for many who are not as their work hours been cut of job lost .cost of everyday living not getting any cheaper only the discretionary purchases are .
They must have some flexibility in the % amount on lending....I was lent money that I am now having trouble paying back so it didn't work for me - but they don't seem to have based it on the 30% guide either....yet I am with CBA too. My stats would be similar to yours re. income and loan repayments if you doubled them as you say you do - if 2 of you can afford to live regularly on $250 a week I'd love some tips though!
I have hand-me-down furniture and appliances in my house, have no other debts, don't drink, smoke, go out, buy anything other than essentials and pay electricity, rates, car rego, petrol, union and insurances, etc! I am single and earn $2500 a FORTNIGHT....taking home about $1750 of that. My P&I home loan repayments (minimum required) are about $1250 a fortnight. So I am left with $500 approx. a fortnight to live on and pay the aforementioned bills....how do people do it (Newstart allowance is less than this, but pension is more!)? A 30% loan would have been ok for me...how did I end up with a loan that is ?50% then (it's worked out on gross income isn't it?)?? I bought last July, and rates have gone up since then, but so has my wage by 4% twice over which is more than the interest rates.
Not sure why atsim can't borrow more than 30% though, because they let me...and in January they were going to lend me even more - another 240K for a part share in an investment property that would have yeilded me about 200 a week - so it did not cover repayments and would have taken even more out of my living money and made my repayments well over 30%. I could not have borrowed that for my original loan, but because it was an investment they allowed it (and they only calculated 80% of the rental income as income btw). Luckily I decided against doing this!
I'm now having to look at renting my PPOR out and having to pay back FHB concessions because I can't keep up the payments much longer on mine, so any tips greatly appreciated!!!
I have hand-me-down furniture and appliances in my house, have no other debts, don't drink, smoke, go out, buy anything other than essentials and pay electricity, rates, car rego, petrol, union and insurances, etc! I am single and earn $2500 a FORTNIGHT....taking home about $1750 of that. My P&I home loan repayments (minimum required) are about $1250 a fortnight. So I am left with $500 approx. a fortnight to live on and pay the aforementioned bills....how do people do it (Newstart allowance is less than this, but pension is more!)? A 30% loan would have been ok for me...how did I end up with a loan that is ?50% then (it's worked out on gross income isn't it?)?? I bought last July, and rates have gone up since then, but so has my wage by 4% twice over which is more than the interest rates.
Not sure why atsim can't borrow more than 30% though, because they let me...and in January they were going to lend me even more - another 240K for a part share in an investment property that would have yeilded me about 200 a week - so it did not cover repayments and would have taken even more out of my living money and made my repayments well over 30%. I could not have borrowed that for my original loan, but because it was an investment they allowed it (and they only calculated 80% of the rental income as income btw). Luckily I decided against doing this!
I'm now having to look at renting my PPOR out and having to pay back FHB concessions because I can't keep up the payments much longer on mine, so any tips greatly appreciated!!!
Housemates. Boarders.
Assumes you're single, of course. Sharing your house immediately cuts your expenses down.
How odd .. sharing doesn't count as income for the ATO or for Centerlink, surprised sharing counts for the FHOG. I swear there's been heaps of FHBs on here who have promptly put mates in all their spare rooms. Do they check the electoral roll and car rego databases or something to make sure only one person/couple is in there? Is it only for the obligatory 6 months starting in the first 12 months that most people sit it out for before they zip out and rent the place out or is it for longer?
If you've been there since last July you'd be darn close to completely out of all the FHOG rules and regulations by now ... its not like those restrictions are on your house for life, or you'd never be able to get married without repaying it all.
If you've been there since last July you'd be darn close to completely out of all the FHOG rules and regulations by now ... its not like those restrictions are on your house for life, or you'd never be able to get married without repaying it all.
I think the difference is if you "charge rent" (and treat part of the house as IP, with tax deductions, etc) you'll lose FHBG and stamp duty concessions, but if you simply "share" the house (with appropriate contributions to utilities and housemates paying [non-claimed] board) it'll be OK.
BTW, I'm not a tax nor OSR expert, so don't quote me, just my understanding of the arrangement.
(sorry about all the brackets - I am trying to quit them!)
BTW, I'm not a tax nor OSR expert, so don't quote me, just my understanding of the arrangement.
(sorry about all the brackets - I am trying to quit them!
)
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I'm surprised that the government makes it so difficult to rent out rooms in a house in Oz.
Here in the UK there's the Rent A Room scheme that allows owners to let or tenants to sublet a room in their home, and the first £4,250 (about $7,000 at current exchange rates) is tax free.
There seems to be a view in the media that FHBs are struggling. Relaxing the rules on subletting parts of their home might go against the spirit of the FHOG, but it could be a pragmatic move that would allow them to service their mortgages, and cost the government a lot less in the long run.
Here in the UK there's the Rent A Room scheme that allows owners to let or tenants to sublet a room in their home, and the first £4,250 (about $7,000 at current exchange rates) is tax free.
There seems to be a view in the media that FHBs are struggling. Relaxing the rules on subletting parts of their home might go against the spirit of the FHOG, but it could be a pragmatic move that would allow them to service their mortgages, and cost the government a lot less in the long run.
Whilst it settled in July, I did not get to move into the house until November as I had to wait for the previous owners to move out (they did a rent-back deal in the purchase contract).
I have rung OSR (anonymously) 4 times over the past few months to try and clarify this...because at first I wanted to let my brother stay there while I was away at work to 'housesit' for me so the place wasn't empty and had someone keeping an eye on it. They told me this was not ok, because I would be giving someone else posession of the house - I told them he would not be paying rent, just staying there while I was away. They told me (4 different people I spoke to that is) that it didn't matter, someone else had exclusive access to the property - I told them it was 'shared' and that he was like a boarder, they said it didn't matter.
The osr website states that for Stamp Duty Concession:
# do not sell, transfer, lease or otherwise grant exclusive possession of part or all of the home, or surrender the lease to another person(s) before moving in or within one year of the date you move in.
This is what they keep throwing at me...apparently letting someone stay with you, boarder, renter, whatever, disqualifies the concession conditions as 'granting exclusive posession of part or all of the home'.
Ridiculous thing is that the First Home Buyers GRANT conditions are different and you can have people sharing with you - it is only 6mths though and presumably that would be done at the same time as the first 6mths of the first home buyer duty concession period (12mths), yet it would be contrary to the duty concession conditions....
Any other suggestions? I am about 7mths in, and am not going to make it to the 12mth mark financially....
I have rung OSR (anonymously) 4 times over the past few months to try and clarify this...because at first I wanted to let my brother stay there while I was away at work to 'housesit' for me so the place wasn't empty and had someone keeping an eye on it. They told me this was not ok, because I would be giving someone else posession of the house - I told them he would not be paying rent, just staying there while I was away. They told me (4 different people I spoke to that is) that it didn't matter, someone else had exclusive access to the property - I told them it was 'shared' and that he was like a boarder, they said it didn't matter.
The osr website states that for Stamp Duty Concession:
# do not sell, transfer, lease or otherwise grant exclusive possession of part or all of the home, or surrender the lease to another person(s) before moving in or within one year of the date you move in.
This is what they keep throwing at me...apparently letting someone stay with you, boarder, renter, whatever, disqualifies the concession conditions as 'granting exclusive posession of part or all of the home'.
Ridiculous thing is that the First Home Buyers GRANT conditions are different and you can have people sharing with you - it is only 6mths though and presumably that would be done at the same time as the first 6mths of the first home buyer duty concession period (12mths), yet it would be contrary to the duty concession conditions....
Any other suggestions? I am about 7mths in, and am not going to make it to the 12mth mark financially....
Wow - that's brilliant. Something like that here would wipe the so-called housing shortage off the map in a month.
When you get up to that kind of wkly income you have plenty of back up but if your only bringing in 6 or 700 pw which is the more reality , bloody costs you a 1/3 of that just to eat and put fuel in the car alone , more probably .
Australia's one of the most expensive costs of living in the world , we're ripped off left right and center. Cut your wage in half atleast and you have where the average really is in reality , and it could easily be very tough I have no doubts about that one.
Just go and buy a loaf of bread , some milk , some fuel and then check out your electricity bill , just to name one then add a few kids and that's not even scratching the surface.
Cheers
Pip, afaik boarders don't have exclusive possession to the part of a dwelling they occupy. renters on a contract do. The OSR employees you have spoken to aren't specialists in this area, nor lawyers, and it sounds like they have one dumb line to spout.
But their line is impractical BS. Based on what they have told you, the grant is void if your mother lives with you, or a sick nephew....and they contribute to the mortgage and food bill.
For boarders, I wouldn't worry one iota about having the grant voided, because I think it is a sure thing, they have zero resources allocated to auditing if there are boarders in the ppr of the grant recipient. They have much bigger issues to deal with.
Never forget the govt is not infallible, nor realistic. Consider the Rudd govt's screw ups to date.
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They wouldn't even need to contribute by the sounds of it!
And like I said earlier, if you got married/girlfriend and the new wife/gf moved in with you in that first year it would void it too.
I wonder how it works if you are a separated parent and you have teenage kids who come and go for weekends. That could void it too. Crazy.
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