Would I be able to get a loan??? -Casual employee-

[HazelFaith]

Hi all,

First time poster here, but long time browser.

I have found a property I really like, and want to buy it.

Would I be eligible for a loan? Here are the details;

- I have almost no savings history - I have only started saving in the last month or so.
- I am classified as a casual/temp employee. I have been working at the same job for 18months on 35hours per week.
- Last financial year, I cleared $36k.
- The property I want to buy is only $155k.
- I would be able to get a 10% deposit (sell car etc).

I am eligible for the first home buyer, could I use that as a deposit?

I want to get a loc account and IO?

Would I have any luck getting approved for a loan considering my work status and lack of savings????

What is the best way to acquire finance to do so.

Thanks in advance.

Liz

 

[rugrat]

Talk to a broker.

But I can tell you that I hold a casual position also, which the banks will tak into consideration because I have held that position for more then two years, Although they do often ask for alot of evidence of sustained income (how much depends on the lender).

 

[Leikela]

I bought my first place when I was 21, and at the time I wasn't long out of university and working as a casual (full time hours). I remember a family friend saying I would never get a mortgage because I had never had any sort of loan or credit card and so had no credit rating. However they were wrong. The main things the bank wanted were just that I had been employed with my employer for more than 12 months and to get a letter from my employer confirming my income and hours worked. I'd just suggest you head on down to your bank to find out and get a pre-approval.

 

[HazelFaith]

thanks for quick reply rugrat/leikela.

Firstly, I am going to see somebody, just wanted to go in with some knowledge.

Also, I have currently got a personal loan for $5000, to which I pay repayments of $68 per week. They didn't hesitate with that personal loan either.

Another major factor to consider is the current climate, I just have a feeling they wouldn't consider me.

And also with the savings history, my brother just bought his house but he had a bit of trouble with getting pre-approved, as he didn't have that great of a savings history ie saving then pulling lump sums of it out.

thanks,

Liz

 

[Kristine..]

Hi Liz

Nearly all lenders now want to see Genuine Savings unless you are buying at or below 85% LVR (Loan to Value Ratio).

If you are buying in NSW for $155,000 you will need about $158,000 for Funds to Complete.

The FHOG in NSW is $7,000

Without Genuine Savings, your maximum borrowing capacity would be $155,000 x 85% = $131,750

$158,000 - $131,750 = $26,250 - FHOG $7,000 = Shortfall $19,250

So, you better get saving!

By the time you save $19,250 you will certainly qualify for the Genuine Savings (3% of $155,000 = $4,650 saved / held minimum 3 months)

Of course, once you have Genuine Savings you will then be able to borrow to 95% of $155,000 (loan of $147,250), so you will have the property and a savings buffer, too!

You can certainly service the loan but without those savings ownership will be a long way off

Cheers
Kristine

 

[Qlds007]

I dont want to disagree with Kristine but i can think of 2 or 3 institutions who do not require any form of genuine savings upto a 90% and a minimum of 12 months casual employment would be fine.

Of course your deposit and settlement costs would need to be evidenced at the time of making the application but as long as your current income can service the loan and all else is sweet you should be good to go.

 

[HazelFaith]

thanks for the reply's.

Atm, the nsw fhog is $14k (till sept).

Qlds007, would you be able to share those lender's with me?

With the loan amount and IO, It would be no problem to service the loan.

The place is in need of a major reno, so its already way under value.

Thanks,

Liz

 

[Bradsdad]

Questions your broker should be asking should include the following:-

How much is car worth? Realisation of an asset could be looked at as genuine savings. The existing PLA debt would need to be taken into account rom sale proceeds.

What industry are you in?
What was your previous job?
The casual employment should be fine as Richard mentioned throuh a couple of lenders but more doors may be opened depending on prior employment history.

Where is property located and what is the size? A sub 45-50m2 would make it tougher as would something rural. Risk gradings on valuation may also be an issue for the Mortgage Insurer/Lender for property type (based soley at present on PP you mentioned)

I wouldn't be talking up your chances on a 95% deal but there is some hope on 90% deal based on limited info supplied.


Regards
Steve

 

[THEHEATH]

Sorry for the hijack, but is this genuine savings requirement usually just for first home buyers???

 

[Qlds007]

Many lenders require evidence of genuine savings (A few do not) although equity is usually an acceptable alternative.

If it is a 2nd purchase and you currently do not have a property then normal rules would apply.

 

[Bradsdad]

Sorry for the hijack, but is this genuine savings requirement usually just for first home buyers???

It's becoming common place for anything requiring LMI

 

[Modal Harmony]

Hi Liz, I presume this property is for you to move into (with FHOG considerations). If so, are you comfortable with the amount of reno required?

I only ask this so you don't become disappointed living in a dwelling where major works are required, but your financial commitments on the purchase preclude you from funding the reno works.

 

[auror]

can you ask your workplace if you can go full-time? given that you have been there as a casual for 18 months @ full-time hrs.

 

[bigdreamer]

Hi there, any updates on if you were successful?
I'm in a similar situation, really worried about not being able to jump in with my casual employment. The difference being I have been there for 5 years and it is a Government position. With the FHBG I have about a 20% deposit so that would obviously help. I've thought about heading down to my bank but it would really make me feel terrible if they couldn't help.

 

[Rolf Latham]

Hiya Dreamer

I dont believe you would have ANY issues if its properly presented and there is historical proof of the income from the one employer.

Id advise having a chat with a good independent broker rather than any one bank at this stage. This will quikcly weed out the lenders that wont suit for you, and you may be given some tools that may show you that not using all your 20 % savings is a good thing.

ta
rolf

 

[bigdreamer]

Hi Rolf.

Cheers for the info. Interesting, I was initially just going to head down to Bankwest who I have my savings with so they could straight away get an idea but I suppose it doesn't matter as I can always prove it with statements, is that how it works? How are bankwest generally with homeloans? Avoid?

Do brokers normally charge a fee for the sort of information you suggested I get off them? If anyone has a suggestion for one in Sydney south west that would be fantastic as I have no idea on what to look for in a broker.

 

[Peter_Tersteeg]

There's nothing particularly wrong with BankWest as long as you understand the ins and outs of their product.

The only variable loan worth taking with them is a 3 year honeymoon loan, so it would want to be reviewed after that period. They have their quirks but as long as their turnaround times are good I don't have a problem with them.

Most brokers don't charge fees, they receive commissions from the lender (which they must disclose to you). It would be reasonable that if you like the information the broker gives you, that you allow them to set up the loan for you and thus get paid, rather than going directly to the lender. The deal you get is the same.