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Advice we can't get a mortgage!


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#1 Fillama

Posted 11 January 2013 - 09:43 AM

Hi all, I'm new to this forum just needed to get our story out there and see if anyone has helpful advice. My husband and I recently tried through 2 different lenders to get a home loan, we aren't trying for a huge amount 315,000 would be enough to build home and land. Initially we were approved but then knocked back when they realised how much child support my husband paid. He pays $120 a week. We have 3 children at home, the eldest 2 are mine from a previous relationship and I receive $91 a month for them. It's true that my husband isn't on a huge income just under $60000 a year but we know that we can easily manage a mortgage. It just kills us to know that we are getting knocked back because of child support we have to pay, we have been told to pretty much wait until the child turns 18 when child support payments hopefully cease sad.gif to me that feels like a lifetime away when we want to own our own home so badly. I was wondering if anyone had been in a similar situation or even had any helpful advice?

#2 MintyBiscuit

Posted 11 January 2013 - 09:51 AM

I haven't been in a similar situation, but have you tried talking to a mortgage broker? They should be able to take all your circumstances into account and try to find you something. I know lending criteria has become a lot tighter in recent years and every extra child adds something like $15k to what they calculate your expenses at, so I imagine it would be quite tricky for you.

Good luck original.gif



#3 justcait2

Posted 11 January 2013 - 09:52 AM

We always struggle to get a loan as we own a business and although we get paid a normal wage each the big 4 banks wont touch us so we went with RESI and have had no problems, perhaps look at a credit union or other smaller lender.

Also if your mortgage repayments will be the same as what you are paying in rent then some lenders will take that into account also



#4 Madnesscraves

Posted 11 January 2013 - 09:53 AM

That doesn't sound right.

I'd be contacting a broker, like Aussie home loans, they do all the leg work for you and will find you the best bank to use. It may end up being not part of the big 4, but a credit union.

Secondly, there could a more contributing factors, like do you have a deposit? is it 10-20% of the purchase of home? Do you have a credit card? Credit cards can actually decrease the loan as they look as if you borrowed the credit limit amount even if you don't use it or pay it out every month.

There is just so many small things. I'd just be contacting a broker. They will find you someone who will accept you.


#5 niggles

Posted 11 January 2013 - 09:54 AM

I'm sorry you are finding it so difficult. sad.gif Obviously I'm not sure of you expenses and every family is different but we have a mortgage about that size and don't consider it a small one. Our income is higher than yours even when we rely on the one income and we really struggle to make ends meet while I'm not working. It's a big stress and I wouldn't wish that as a long term situation on anyone. I guess my point is that perhaps it would help you to do the sums again. Would more than 30% of your income be going towards the mortgage repayments? It might help you to see why the lenders are making the decision they are.

Also have you spoken with a mortgage broker? They may be aware of products you haven't looked into that might suit you. And they don't cost you anything so it's worth talking to one. Much easier than approaching each individual lender yourself.

#6 Pull Up A Beanbag

Posted 11 January 2013 - 10:00 AM

Our mortgage is $292k, borrowed in June 2012.  Our repayments are $820 a fortnight (they've been left here since rate cuts.  I think nominally the rate is about $800/fn).  DH is on about $50k.  We would struggle to pay on one wage, with no kids.  I find it hard to believe, and I'm sure the banks do too, that you would find it as easy as you believe to pay off a $315k mortgage on $60k with $120 in extra expenses that "normal" families don't have.

Plus, any issues with how much you've saved in deposits, lenders mortgage insurance etc.

#7 ~Jodama_Feral~

Posted 11 January 2013 - 10:22 AM

Thats a very big mortgage for that income. You repayments alone would be around $1500, if not more. And with paying out child support it lessens you household income again.

You could approach a mortgage broker and see if they can help but I would look at purchasing a cheaper house instead of building or waiting until you have a larger deposit to bring the loan amount down a considerable amount.

Edited by kriattica, 11 January 2013 - 10:23 AM.


#8 Fillama

Posted 11 January 2013 - 10:22 AM

Oops I forgot to add that with my income from my part time job and FTB that it adds $29,000 to our income. That's why we wouldn't find it too much of a pinch. But I was told by the finance officer that they mainly look at the first income which is my husbands. We have a 5% deposit, one of the lenders only required 1%. We have no credit cards, no debts, own both of our cars with no money owing on them

#9 Grant Me Wings

Posted 11 January 2013 - 10:25 AM

I agree with the PP.

I'd love to see the budget that would allow you to afford that level of borrowing on the income stated.

However banks are not allowed to trust your budget anyway, they have minimum amounts that are set as living costs.

24k repayments (allowing a bit for interest rate fluctuations) on under 50k net would be really hard before adding in the 6k in child support.

Do you really think you could live and support three kids on 20k plus whatever FTB you receive?

I put your figures (and I approxed a few things such as FTB income) into a "How much can I borrow calculator" for one of the more "generous" lenders and they say you could borrow $150k.

Banks do say no for a reason, not just to be frustrating or ruin your plans.

-----

Okay you did a major update while I was typing, that makes it more affordable, but a 1% deposit is super low. Are you able to show a savings history? You will have to pay lenders insurance which isn't cheap and also is an extra level of approval (the insurer has to approve it).

In this market if you can get a loan with such low equity it is a big risk that you will end up with negative equity if something does go wrong.

If you are determined to buy, try a broker or non-bank lenders.

Unless you are going for a loan in just your husbands name, your income (and expenses) will be considered as well so that person was an idiot.

Edited by WinterDancesHere, 11 January 2013 - 10:32 AM.


#10 niggles

Posted 11 January 2013 - 10:29 AM

We would struggle to meet our repayments even with that extra $30k but your best bet is still to talk to a mortgage broker.

#11 Apageintime

Posted 11 January 2013 - 10:30 AM

I have a mortgage about the same.

I personally earn more than twice what your husband does, and my husband earns a little less than yours.

We have no kids, and no other debt, and this mortgage is just what we're comfortable with. I don't know how you would be comfortable with that size loan!

also, maybe its not just the loan amount, but the fact you're building, which is always riskier to banks to lend money for something they can't touch.

Talk to a mortgage broker, but you may need to look at buying an established house.

#12 Fillama

Posted 11 January 2013 - 10:30 AM

We would have approx $750 left per week after each repayment. I don't know abut others spending habits but for us that's more than enough to comfortably survive on. We were told by both lenders we would qualify for $240,000 the other was a bit higher at $246,000 but that's just not enough for a house were we are

#13 PatG

Posted 11 January 2013 - 10:37 AM

I think that they may look at you differently if you can come up with a larger "saved" deposit.  5% is very low.  What are you paying in rent at the moment and how does that compare with the expected repayments?  Have you factored in extra costs of owning a home cf renting?  Home insurance, rates, water (depending where you live)......  And what will the repayments be if interest rates rise?

Edited by PatG, 11 January 2013 - 10:39 AM.


#14 ~Jodama_Feral~

Posted 11 January 2013 - 10:39 AM

Your figures dont add up right. If you pay $120 a week  child support, still have $750 to live on and can make the repayment. You must earn a lot more than $60000. Because them figures alone come to $60000 and thats without taking tax into consideration.

Edited by kriattica, 11 January 2013 - 10:41 AM.


#15 Fillama

Posted 11 January 2013 - 10:40 AM

Hi patG that's what are going to do now save for a larger deposit, we pay $420 in rent and we were told our maximum repayments would be $453

#16 Rosepickles

Posted 11 January 2013 - 10:41 AM

Hi Op,

It is awful when that happens. The banks have become quite strict after the GFC. Having three children at home also reduces your borrowing power a fair bit.

I would definitely talk to a mortgage broker, but it sounds like you might need to save a larger deposit. This will also reduce the mortgage insurance you will have to pay (you pay this when you borrow over 80% of the house value). This will save you a lot of money and also increase your borrowing power a little.

Our current loan is based on $315k also and we pay around $450 a week. We have a slightly higher income than yours and we can very comfortably afford to pay that amount and more so I understand why you say you can afford it.

Good luck original.gif

#17 Fillama

Posted 11 January 2013 - 10:43 AM

Kriaticca, with my part time job plus FTB that adds nearly $30,000 to our annual income. They are just running off my husbands income as its the "first" income

#18 Fillama

Posted 11 January 2013 - 10:45 AM

QUOTE (Rosepickles @ 11/01/2013, 08:41 AM) <{POST_SNAPBACK}>
Hi Op,

It is awful when that happens. The banks have become quite strict after the GFC. Having three children at home also reduces your borrowing power a fair bit.

I would definitely talk to a mortgage broker, but it sounds like you might need to save a larger deposit. This will also reduce the mortgage insurance you will have to pay (you pay this when you borrow over 80% of the house value). This will save you a lot of money and also increase your borrowing power a little.

Our current loan is based on $315k also and we pay around $450 a week. We have a slightly higher income than yours and we can very comfortably afford to pay that amount and more so I understand why you say you can afford it.

Good luck original.gif


Thank-you for verifying that Rosepickles! I was beginning to feel like i was under some sort of scrutiny! Xo

#19 ~Jodama_Feral~

Posted 11 January 2013 - 10:46 AM

I would be asking questions then because unless you are just putting into your husbands name then it should be based on joint incomes. We never had that happen before and even when I have only had FTB to add to the income it still counted and helped.

See a mortgage broker.

#20 Fillama

Posted 11 January 2013 - 10:50 AM

Thanks so much for the advice guys, yeah we will definitely go and see a mortgage broker. I'm not sure why they are only going on my husbands income. The finance officer told me of a guy that she had a few weeks ago and he worked 2 jobs, even though the officer pleaded his case the lenders still knocked him back because they only went on one of his jobs incomes. Also we were going to go through key start which meant we didn't have to pay the lenders insurance

#21 BookishOne

Posted 11 January 2013 - 10:58 AM

QUOTE (Jetay @ 11/01/2013, 11:50 AM) <{POST_SNAPBACK}>
Thanks so much for the advice guys, yeah we will definitely go and see a mortgage broker. I'm not sure why they are only going on my husbands income. The finance officer told me of a guy that she had a few weeks ago and he worked 2 jobs, even though the officer pleaded his case the lenders still knocked him back because they only went on one of his jobs incomes. Also we were going to go through key start which meant we didn't have to pay the lenders insurance


When we took out our first loan years ago I was still studying & working casually (but permanent / rostered casual with regular shifts) & the bank would only take into consideration $10000 of my earnings because I was 'casual' not 'part time'. Could this be the issue? That's the only reason I can think of why they wont take into account your wage. It was a real pain at the time, I had been working at the same place in the same position for about 4 years and my earnings never dropped below about $35000, quite often it was way over, but the bank wouldn't budge. Just an idea...

#22 *melrose*

Posted 11 January 2013 - 11:02 AM

It's so hard out there, good luck op i am sure someone will help you original.gif

#23 niggles

Posted 11 January 2013 - 11:02 AM

I think you mentioned your $30k income includes government benefits? I'm not sure but wouldn't think that would be taken into account?

#24 emnut

Posted 11 January 2013 - 11:56 AM

QUOTE (Rosepickles @ 11/01/2013, 11:41 AM) <{POST_SNAPBACK}>
Hi Op,

It is awful when that happens. The banks have become quite strict after the GFC. Having three children at home also reduces your borrowing power a fair bit.

I would definitely talk to a mortgage broker, but it sounds like you might need to save a larger deposit. This will also reduce the mortgage insurance you will have to pay (you pay this when you borrow over 80% of the house value). This will save you a lot of money and also increase your borrowing power a little.

Our current loan is based on $315k also and we pay around $450 a week. We have a slightly higher income than yours and we can very comfortably afford to pay that amount and more so I understand why you say you can afford it.

Good luck original.gif


Yes but you have 2 child not 3 and do you pay any child support let alone $120/week in child support?  Big big difference there.

With a low deposit you usually need a higher income to borrow equivalent amounts as that is definitely a consideration.  Also how long have you worked part time for?  If less than 2 years then that is not usually considered at all and part time is considered differently to full time income and FTB is often not taken into account at all

Edited by emnut, 11 January 2013 - 11:57 AM.


#25 Giota

Posted 11 January 2013 - 12:11 PM

Honestly that is a big loan for a smallish income. But in staying that I have double the debt on only a slightly bigger combined income and we manage not easily though.

Just bear in mind your hubbies child support will go up considerably when the child turns 13. Also I don't know if this is the case for you but some lenders are happier to loan for asn existing property rather than to build.




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