Browse Forums Home Finance 1 May 31, 2010 5:37 pm Hi all I'm 25, married and my wife and I are expecting our first child in January 2011. We're really keen to get our first place, and are willing to start off small and simple, say an old 2 bedroom house around 10-12km's from the Brisbane CBD. We are both on similar incomes of approx. $56,000 before tax, each. The catch is this, my wife wants to take 12 months off work (she is a teacher (not permanent but on a contract)) and I'd like to know if a bank would lend us enough money to cover the cost of our proposed purchase, we will only have a 5-10% deposit (not including the FHOG which we assume will just be consumed by est. costs etc.) on the basis of her being employed presently, and then giving us some flexibility during that 12 month period that my wife is off work and hence whilst on one income. And then repayments returning to normal (or even increased to catch up if required) once shew returns to work the following year. I am pretty much one step from speaking with a bank or mortgage broker on this issue, but just thought I would get some advice from others before heading in. I know there are lots of products out there that offer some flexibility for these types of situations but just wanting a bit more information if anyone can help? Otherwise I guess we just need to wait until she returns to work and then go for the loan then. I'm not sure if it makes any difference, but we have NO other loans to pay off such as car loans, and have a flawless record in paying off our credit card in full each month before the interest free period expires. Re: First Home Loan and wife off work 2Jun 01, 2010 7:55 am We went through a mortgage broker last year to get our loan. We already had a 16 month old, my wife and I were both working, although my wife was only working 3 days a fortnight and we were expecting our second child in January 2010. The mortgage broker just used our current situation when filling out the paperwork and we had no problems getting approved. Obviously we made sure that we could afford the repayments during the 12 months my wife is on maternity leave. Re: First Home Loan and wife off work 3Jun 01, 2010 9:15 am we are also nursing a similar situation. one broker we discussed our situation with( not the one we ended applying with) said if the spouse is a full time( or permanent part time or something like that) and they will go back to the same employer after maternity leave, it should pose no problem to the bank. VICTORY 1800, EN-SUITE, DOUBLE GARAGE, FAMILY ROOM AND ALFRESCO Land Settled: 20 July 2010 Site Scrap: 30 August 2010 Slab Pour: 20 September 2010 Frame Complete: 23 September 2010 Fascia and Gutters: 28 September 2010 Roof Complete: 06 October 2010 Lock-up complete: 28 October 2010 Plaster complete: 29 October 2010 Fix-out complete: 22 Nov 2010 PCI 7 FEBRUARY 2011 Re: First Home Loan and wife off work 4Jun 03, 2010 3:07 pm You should have no problem if you apply for the loan now. Note that you would want to take into account the need for additional funds during that year to make sure you don't end up short of funds. For this reason it would be ideal to look at either a guarantor home loan for 100% of the purchase price or a 95% + LMI loan. You could then put your additional funds in an offset account or in the loan account and draw down on them when required. Try to work out how much you will need and then speak to a mortgage broker. It is also possible to get a loan with some lenders while on maternity leave however you may need to prove the date that you are returning to work and generally you must be returning to work relatively soon. For a contract worker this may not be possible. Good luck with your baby and home! Re: First Home Loan and wife off work 5Jun 03, 2010 3:13 pm We got our LoC approved for our build even though I was 7months pregnant or something And hubby is self employed which should have made it harder I hope your wifey is clever and works at a Govenment or Catholic school and gets paid maternity leave? (unlike me *grumble*) Just make sure you can pay the minimum repayments while she is off work. OR while your both still at work, pay extra off the loan as I believe your repayments can then be taken from these extra payments Custom European Cabinets - Melbourne Kitchen Specialist PM for business details as website currently being updated! Our Crazy Owner Builder Journey! Re: First Home Loan and wife off work 6Jun 04, 2010 10:00 pm The first thing you need to make sure is, whether or not you will be able to meet the repayments, if your wife is not working. If the answer to the above question is YES, then you can apply, using your current situation which is, both working with an income of around 56 K each... If you feel that you will be stretched and find hard to make the repayments, then i would recommend not to go ahead with the loan. Land - Northerly Estate, Piara Waters Titles Issues 05 April 2010 Building with Ross North Homes Prestart Completed 12 April 2010 Finance Approved 01 May 2010 Slab down 29 May 2010 Frame Completed 28 June 2010 Roof Completed 22 July 2010 Lockup 12 August 2010 PCI 24 Sep 2010 Handover 08 Oct 2010 Building Thread https://forum.homeone.com.au/viewtopic.php?f=31&t=32295&start=0 Re: First Home Loan and wife off work 7Jun 05, 2010 3:50 pm Raphael, I'm not sure specifically what flexibility banks offer in terms of altering repayments. I know Wizard (or was it Aussie??) used to offer a thing called 'pregnant pause' whereby you didn't have to make repayments for 9-12months(or whatever it was). Of course, during that period though they still whack on monthly interest - the entire loan doesn't get put 'on hold'. So some banks may look at doing something like that if they know and approve it in advance?? The other thing you could look at is an interest only loan (with the option to pay principle and interest when you are in a position to), and that is setting up the loan so that you only have to repay the interest - not the principle and interest. Then, once your wife is back at work, you can begin to pay off the P&I together. Or, as someone previously suggested, use the time your wife is still working to pay off as much as you can, then use that excess to cover the 'missed' or 'lower' payments whilst on one income. Just be careful though and check that your bank will actually allow using deductions from your excess paid in. Mine didn't, I actually had to redraw the amount each month then repay it back in (roll eyes). So if going for this option and your bank is like mine, you would need to make sure you had the facility to redraw each month (or for the next few months, just put it into a separate bank account). Anyway, hopefully a few things to consider there. 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