Is it going to be possible?

Any general questions you might have in regards to loans and finance.
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CuriousOne
Posts: 6
Joined: Fri Dec 12, 2014 1:06 am

Is it going to be possible?

Post by CuriousOne »

Hi,

I am currently trying to find what my chances are of being able to get a mortgage.

I am a single mum on a disability pension. I am currently going through property settlement with my ex, and am likely to come out with something in the range of 250 - 350k.

Given what property is like in this area, I am in a situation where if I don't buy straight away, I will be very quickly priced out of the market, and as it is my chances of finding something are going to be fairly slim.

If I were purchasing, my my total income would be approx 37k, comprising of DSP, FTB A & B, Child Support and Carers Allowance for my son. (This isn't including the annual supplements or rent assistance).

I have never had credit issues, money is tight so I don't have any savings history beyond the money I will be getting in the settlement, but I also rent privately, which currently takes up over half of my income. While I hope it is less, I am probably looking at a loan of around $150k, which I know I can afford easily budget wise, but do I actually stand a chance of getting approval for it? What would be roughly the top amount I would potentially get approval for with that as my sole income source?

Thanks,

Sharon

William Thai
Mortgage Specialist
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Joined: Tue Aug 28, 2012 11:36 am
Location: Sydney, Australia
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Re: Is it going to be possible?

Post by William Thai »

Hi Sharon,

Thanks for posting on our home loan experts website forum.

Based on what you have told us, it does sound like you would be eligible for a home loan!

However we would need to place you with a bank that would accept borrowers who are currently not working and relying on government benefits & child support to show the affordability of the loan.

With the incomes you have provided us & with one of our lenders that would accept all of the above I have calculated the maximum loan amount you would be eligible for is $158,000.

Hope this helps!
William Thai
Mortgage Broker
P | 1300 889 743 E | william@homeloanexpert.com.au
Home Loan Experts

CuriousOne
Posts: 6
Joined: Fri Dec 12, 2014 1:06 am

Re: Is it going to be possible?

Post by CuriousOne »

Thank you so much! I was looking at about 150k (max) so that is exactly what I was hoping to hear!

In terms of the lender you are referring to, what sort of interest rates would I be looking at? Would I have much flexibility in terms of fixed rate or interest only periods?

CuriousOne
Posts: 6
Joined: Fri Dec 12, 2014 1:06 am

Re: Is it going to be possible?

Post by CuriousOne »

Oh, the other thing I wanted to check... Before I was married, my ex purchased a house claiming the first home owners grant. We went on to purchase the second house in both names after selling the first.

Am I right that because the second house was in both names, that excludes me from claiming the first home owners grant (or whatever the equivalent is these days)?

William Thai
Mortgage Specialist
Posts: 14
Joined: Tue Aug 28, 2012 11:36 am
Location: Sydney, Australia
Contact:

Re: Is it going to be possible?

Post by William Thai »

Hi Sharon,

Unfortunately you wouldn't be eligible for the First Home Owners Grant or any equivalent as you suspected.

In terms of rate with possible lender that would accept your situation, their rates vary between 4.7% to 5% depending upon the exact amount you purchase for. You would also be allowed to have the loan interest only for up to 5 years however unfortunately they currently don't offer any fixed rates at the moment.
William Thai
Mortgage Broker
P | 1300 889 743 E | william@homeloanexpert.com.au
Home Loan Experts

CuriousOne
Posts: 6
Joined: Fri Dec 12, 2014 1:06 am

Re: Is it going to be possible?

Post by CuriousOne »

Sorry - I have a couple more questions.

If I were needing to borrow a bit more, say $180k, would having my mother as guarantor on the loan extend my borrowing power? She is currently working (she reaches 65/retirement age at the start of 2016). Her house would be worth maybe $650k, with a negligible mortgage (I don't know how much exactly, but well under $50k). When she retires she will be going onto a pension, but has enough super to pay out her home loan with a bit in the bank. She is keen to see me purchase, and is happy to help out in any way that will secure the loan I need. With mortgage payments/home ownership expenses and loss of rent assistance, I will still be about $500 per month better off than I am currently while renting, so covering repayments won't be an issue.

The other question I have - I currently have a credit card with a $2200 limit. Is this going to impact my borrowing power? I would prefer to keep it, as it does come in handy to occasionally cover bills or extra expenses while waiting for the next pay to come in.

Thank you for your help!

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Tony Dao
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Location: Sydney, Australia
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Re: Is it going to be possible?

Post by Tony Dao »

The guarantor will not extend your borrowing power because it is limited by your income.

The Credit card will only decrease your borrowing proportionately.

Hope this helps.
Tony Dao
Senior Mortgage Broker
P | 1300 889 743 E | tony@homeloanexperts.com.au
Home Loan Experts

CuriousOne
Posts: 6
Joined: Fri Dec 12, 2014 1:06 am

Re: Is it going to be possible?

Post by CuriousOne »

Would it be possible to get the higher amount (about $30k extra) approved if we were to apply together for a joint mortgage? Or is that unlikely to be approved/of any benefit because of her age/situation and the required loan duration?

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Tony Dao
Mortgage Specialist
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Joined: Fri Apr 01, 2011 2:41 pm
Location: Sydney, Australia
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Re: Is it going to be possible?

Post by Tony Dao »

Hi Curious one,

That is correct. Putting her on as a joint applicant would work however age will come into play with the lender and there will be limitations and possible lower borrowing power because we are lowering the loan term now as well.
Tony Dao
Senior Mortgage Broker
P | 1300 889 743 E | tony@homeloanexperts.com.au
Home Loan Experts

CuriousOne
Posts: 6
Joined: Fri Dec 12, 2014 1:06 am

Re: Is it going to be possible?

Post by CuriousOne »

Hi,

I am finally getting close to a point where I can look at purchasing a house. I am wondering if I can find out what my borrowing power would be currently, based on slightly adjusted figures and the recent interest rate changes?

My income would be approx 40k per year (all tax exempt), comprised of DSP, Carers Allowance, FTB and Child Support.

Thanks,

Sharon

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