Guarantor Loans / General Loan info

Any general questions you might have in regards to loans and finance.
christinecolin
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Joined: Sun Apr 11, 2010 3:15 pm

Guarantor Loans / General Loan info

Postby christinecolin » Sun Apr 11, 2010 3:23 pm

My partner and I are looking to buy a home later this year. My gross salary is $120,000, my partner is a teacher working on a casual basis at present.

We have no debts, have savings of $40K and would like to buy a home around $700K in value.

Is $700K realistic? Will the casual nature of my partner's employment be a problem? (It's v. difficult to get a permanent teaching position!) and what is the best way to prove my partner's income? Could 6 months of payslips showing steady 4+ days of work a week be useful?

We have moved over from the UK and are about to become permanent residents (before buying), can we use our parents in the UK as guarantors if the amount borrowed exceeds 95%?

Thanks

Colin

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Otto Dargan
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Re: Guarantor Loans / General Loan info

Postby Otto Dargan » Sun Apr 11, 2010 6:17 pm

Hi Colin,

$700k sounds realistic based on your salary and what casual teachers usually earn (assumed F/T Casual). We have helped many teachers who are employed on a casual basis, it seems the government needs full time teachers yet prefers to hire teachers as casual employees then ask them to work full time hours!

I'm not sure why they do this, however the good news is that many lenders are aware of this situation and consider casual teachers to be quite secure compared to casual workers in other industries. Generally lenders will calculate your income using an extrapolation of your Year To Date (YTD) Income. Some lenders may also look at your 2009 group certificate to see if this matches the YTD figure and then they would use the lower of the two.

It is better for you to wait until you are a Permanent Resident before buying as then you will be eligible for first home benefits such as the $7,000 grant. You may receive additional benefits depending on which state you are buying in.

Unfortunately you would not be able to use your parents as guarantors unless they own property in Australia which we can use as security. Real Estate in the UK cannot be used as security by Australian lenders. You may be able to get you parents to borrow money on their property in the UK and then lend it to you as a deposit. This would allow you to avoid LMI which is quite expensive for a $700,000 purchase.
Otto Dargan
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