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  1. #1

    Default Can I get a mortgage in my situation..

    Hi guys Myself and partner are looking at a home and land package in a Napier subdivision using GJ Gardner homes costing $390,000 complete.

    My situation makes it tough for the bank to loan...I have bad health and am on the supported living allowance and only work every now and then when I can.

    My partners income is 55k gross, mine is mostly the supported living + some work = 21k a year.

    We have a deposit of 40k. We are young ,No kids, cheap insurance due to partners work and a work vehicle. No debts

    Would the bank loan knowing my poor health and on supported living or are we just kidding ourselves with a 350k loan?
    Would it help having parents as guarantor? Any advise?

    Thanks

  2. #2
    Join Date
    Jul 2011
    Location
    Tauranga
    Posts
    2,769

    Default

    Find a good broker they can help and don't charge you for their services.

  3. #3

    Default

    Have a play on this mortgage calculator.
    Then go to the Money planner, and that will give you an idea how the monthly budget looks.
    Be conservative (ie pessimistic) on utilities such as power, rates, home insurance.
    Also you should leave a small emergency fund in the bank (ie not included in your deposit) for unexpected essential costs.

    Many threads here on the pitfalls of loan guarantees.
    Are the parents able to loan / gift you instead?

    As Mac says a broker will assist.
    However using these calculators and printing them off to take to the broker will save a lot of initial fluffing around with them.


    https://www.sorted.org.nz/calculator...gage-repayment

    https://www.sorted.org.nz/calculators/money-planner
    Last edited by speights boy; 12-08-2013 at 03:47 PM.

  4. #4
    Join Date
    May 2007
    Location
    Hamilton
    Posts
    3,594

    Default

    If you can get a mortgage for $390k, would you really want to?

    Net annual income after tax, your wife $45k
    Yours is $18k

    Loan at 6% over 20 years would need $30k per year. This doesn't leave much to live on! If interest rates go up, maybe $34k per year.

    I personally think you should drop your level of spend, or else look for a twist, like below.



    Otherwise you are just tieing all your cashflow up into debt commitments.

    Ross
    Last edited by donna; 20-08-2013 at 12:15 PM. Reason: last warning - links to your website only in your signature
    More Profit from Property? TEACH ME MORE
    Ross Barnett - Coombe Smith Property Accountants
    Proud to give the best property advice for over 13 years.

  5. #5
    Join Date
    May 2007
    Location
    Hamilton
    Posts
    3,594

    Default

    Also, there is always extra's in a house build. does it include curtains, mail box, tv Aerial etc etc

    $390k sounds too cheap!
    More Profit from Property? TEACH ME MORE
    Ross Barnett - Coombe Smith Property Accountants
    Proud to give the best property advice for over 13 years.

  6. #6
    Join Date
    Feb 2013
    Posts
    427

    Default

    Best to talk with your bank.

    Some of the above comments are quite correct in saying does this $390K include everything? Curtains, carpets, fence, letterbox and all related items?

    Personally if it was me I would hold off on the risk for maybe 2-3 years and save a larger deposit. The larger the deposit the less chance of the bank turning you down and it's just less owing debt. Another idea is maybe buying something like a 2 bedroom place in a first home buyers area for less holding on to it for a few years and then upgrading. I have no idea where in Napier you need to be but Taradale does have some affordable, functional options in the $200's bracket.

  7. #7
    Join Date
    Oct 2011
    Location
    1/18 Seaview Road, Paraparaumu Beach
    Posts
    267

    Default

    Quote Originally Posted by speights boy View Post
    Have a play on this mortgage calculator.
    Then go to the Money planner, and that will give you an idea how the monthly budget looks.
    Be conservative (ie pessimistic) on utilities such as power, rates, home insurance.
    Also you should leave a small emergency fund in the bank (ie not included in your deposit) for unexpected essential costs.

    Many threads here on the pitfalls of loan guarantees.
    Are the parents able to loan / gift you instead?

    As Mac says a broker will assist.
    However using these calculators and printing them off to take to the broker will save a lot of initial fluffing around with them.


    https://www.sorted.org.nz/calculator...gage-repayment

    https://www.sorted.org.nz/calculators/money-planner
    These calculators are ok for working out your own budget, but the banks will have their own servicing calculators for loan affordability (as they all differ). Though do speak to your mortgage broker to save time as they will assess your situation and know which bank(s) will be more user friendly for your situation. They should also analyse your situation and discuss whether the borrowing level suits your budget/spending. All the best
    Last edited by Craig Pope Mortgages; 13-08-2013 at 11:13 AM. Reason: just re clarified a point
    Craig PopeCraig Pope Mortgages & Insurance
    www.craigpope.co.nz

  8. #8
    Join Date
    May 2007
    Location
    Hamilton
    Posts
    3,594

    Default

    Quote Originally Posted by td91 View Post
    Best to talk with your bank.

    Personally if it was me I would hold off on the risk for maybe 2-3 years and save a larger deposit. The larger the deposit the less chance of the bank turning you down and it's just less owing debt. Another idea is maybe buying something like a 2 bedroom place in a first home buyers area for less holding on to it for a few years and then upgrading. I have no idea where in Napier you need to be but Taradale does have some affordable, functional options in the $200's bracket.
    Good advice. Personally I would go for the buying a cheaper property, as it gets your foot into the property market, and if house prices do increase substantially you aren't totally missing out.

    Ross
    More Profit from Property? TEACH ME MORE
    Ross Barnett - Coombe Smith Property Accountants
    Proud to give the best property advice for over 13 years.

  9. #9
    Join Date
    Sep 2012
    Posts
    359

    Default

    Friends of ours recently purchased a property, however with both of them on the application they were declined. This was due to one of them earning a very low wage. However when they applied with just the high earner, they were accepted.

    I could be completely wrong, but this leads me to believe the banks look to see if the relationship was to fail, could either one afford the mortgage? However a single person with a good income was fine - can get flatmates in etc if it did turn bad.

    Anyone else seen this?

    Also agree $400K is way to high given your incomes. regardless of whether the bank will lend or not.

  10. #10
    Join Date
    Feb 2013
    Posts
    427

    Default

    [QUOTE=Gladdynook;314186]Friends of ours recently purchased a property, however with both of them on the application they were declined. This was due to one of them earning a very low wage. However when they applied with just the high earner, they were accepted.

    Maybe if the high income earner can service the mortgage if the relationship was to fail, then it's best to give the mortgage to the high earner as the low earner could try to keep paying the mortgage and buy the high earner out but more than likely there's a huge chance of having to go to mortgagee sale.

    A note to the OP:
    Also remember that the bank might consider factors such as the two of you might have children, they may also consider factors such as the relationship not working out and one of you having to service the mortgage yourselves. My best advice (as said above) is to find something cheaper get your foot in the door and then get that brand new subdivision home in a few years. For most a first home isn't a brand new home in a subdivision. Not only will buying something cheaper make the bank loaning to you more likely it will take a bit of pressure of the pocket, plus it gets you off the rental cycle of paying rent to a landlord and having nothing to show for it.


 

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