Hi ozbargain
I have currently got a home loan of $175,000 value of property is only 195….
The bank has given me an indication of how much more I can borrow to build my home but it is coming around 95k short….. has anyone got an additional job to get approved for more funds from bank and if so how long did you have to be in your new role for?
Don't worry, the government will bail out anything and everything related to housing and construction.
At this point, the government might as well start their own construction, real estate and loan companies with the amount of propping up of the market they've done.
Sad to say but it's totally necessary. Too late to dig out of the hole without seeing a massive fallout on the economy if the major contributor to GDP fails.
Im actually with TheAccountant here builders and in general tradies are VERY well paid they probably need a shake up to there industry because it is unsustainable levels of cash and growth
Not to mention the government itself who skims around 45% of the cost of a new house in TAX! (According to a HIA report from a few years back so its probably more now. ) Now that government has embarked on QE they could axe all taxes, print up the shortfall and only bring them back in to slow down the economy in the unlikely possibility that it becomes 'overheated'. But that would help the public and revive the economy so we can't be having none of that. Especially after all the hard work they've put in this year smashing it to bits. Modern Monetary Theory, look it up.
Don't forget this is mainly due to House Prices rising and people using Tax deductions for renos etc re: Investment properties. They don't care how much the Tradie costs as they are deducting it and the house prices continues to rise. This past 30 years of GROWTH has stuffed our country for the next 100 years.
@askme69: No not 'mainly' because if that. House prices in Australia are not determined (usually) by normal market forces of supply and demand, they are determined mostly by the availability of credit. When the banks open up the tap of cheap credit then people will borrow more and with more funny-money around to play with vendors will ask a higher price. Add to that the influx of foreign money to our housing market pushing competition up even higher and you have the real causes of mad house prices, along with the aforementioned taxation. Most investment house owners are just mums and dads trying to get ahead and like any investment, if the govnuts are going to tax any gains as income then allowing deductions to be claimed is only fair. Prices are softening now because the CCP have clamped down on money leaving the country (China) and the banks are tightening up credit due to the coming depression.
@askme69: I cant agree with that if the property is an investment there needs to be tax deductions like any investment it carries risk and reward - however i maintain my stance on the government doesnt need to keep pouring 'extra' $$$ into a industry that needs to re-establish and equilibrium
Im with Eightimmortals when it comes to this
I do somewhat agree with the statement 30 housing price growth has stuffed the country - however there are still loads of areas where housing is affordable the issue is the majority of work is around our capital cities
The state governments have failed (opposed to the federal) when we had years and years of mining boom the government filled there pockets and didnt reinvest money to other areas of job growth.
I main examples are WA and QLD
However Even Victoria has lost large numbers of jobs due to closure of factories and power stations etc in areas like Geelong
what would happen should things go south…
OP profile says Melbourne.
Depending on where you apply (this is where a broker comes in handy) between six - twelve months at a second job before any of the income can be considered. Needs to be permanent, too, usually, if less than twelve months' employment in second job. Casual won't cut it. Some institutions will haircut the second job income by as much as 50%, others may use it all. Seriously, talk to a broker if you're wanting to do this. Especially if the loan is going to put you into LMI territory because your broker should know which insurer the different banks use, and know to steer clear of the banks who use insurers who insist on twelve months in second role.
OP what is your income?
You have not provided the relevant information.
a property for 195k?? where?
vacant land
Hi OP, I might be able to contribute. I'm a commercial banker working for one of the big 4s. Used to be a lender in the heyday. Unfortunately Banks have to comply to NCCP (link: https://www.legislation.gov.au/Details/C2020C00105 - refer clause 130) regulations which requires financial institutions to ensure they collect sufficient information to validate your income and living expenses. This is then used for a serviceability (not to be confused with affordability) test. For a servicing test, the Bank's model usually adds a 3% buffer on to the market interest rate to ensure you can service the loan to counter for interest rate movements.
Having said that, there is also normally an 80% LVR cap on using any property - you are currently at circa 89%. This would mean that you'll have to kick in approximately $19k of your own cash to bring it to 80%. Any reno cost generally gets added to the value of the property to maintain the 80% LVR.
Nevertheless, your issue is servicing. Use this calculator to figure out how much you think you can afford: https://moneysmart.gov.au/home-loans/mortgage-calculator. Its like any mortgage calculator on a bank's website, but has the added convenience of asking how much you can afford - just remember to add the 3% buffer when putting in the interest rate.
Royal Commission had made it harder as it makes Bank's even more compliant to NCCP.
Mate how are you a commercial banker and yet broke? Too many fancy lunches? Jks. May I ask what type of financing you focus on?
There is always good ones and bad ones. You need someone at the helm of a company when it goes into administration / bankruptcy whether through pure luck or of their own incompetence.
Hello mate, haha good stereotype. I’m broke because of a single income household with two toddlers! The focus is not really on finance right now - more so supporting existing business customers stay afloat given current environment. I guess this sometimes means assisting with emergency finance to keep the lights on for some of these hard working Australian businesses. Not a great time for any business.. Why do you ask?
Need to find the right broker that can fill out the forms properly
If I understood, you have a loan of $175,000 against a property worth only $195,000 and looking for additional $95,000 loan that you cannot get without a second job? I am not a financial advisor but it does sound you're potentially getting in far over your head into debt.
Please consider the current financial climate and what would happen should things go south.