Browse Forums Home Finance 1 Feb 13, 2014 2:34 am Hi All Just wondering if anyone can give advice. I am trying to help my brother get into the housing market. I am going to cover him for the 20% deposit. He has just came out of a long term relationship supporting girlfriend and her child. So no savings bur like i said we will cover the 20%. And idiot gave her everything. Car, furniture, electronics and everything so has no assets. He is in North Queensland and houses are cheap. He earns 65K a year. And another 10K in overtime but it appears that doesnt get taken into account. No debts. Just food and general living expenses. I spoke to my nab business banker who said no to a loan of 250K although i dont think she was all that interested. Didnt do anything but put the figures in. On there website it said he could go to 330K not that he would. Said couldnt afford it. The repayments where cheaper then his rent. He has no credit cards and been in the same job for 3 years. Can anyone give advice to help get him pre approval. Which bank is not so strict. I didnt think it would be a issue with 20% and such a small loan these days. Thanks Caz Re: Home loan for brother 2Feb 13, 2014 4:30 am They normally like to see savings rather than a gift for the deposit but there are likely to be some lenders not as strict. My advice is actually to see a broker - I've always found banks to be next to useless at selling their own products, especially any of the big 4. It always surprises me that I can a home loan faster and for a better rate through a broker than dealing with the bank direct. http://camdenbuild.blogspot.com.au/ by invite only please pm me Re: Home loan for brother 3Feb 13, 2014 11:41 am Hi Caz, What exactly is the issue? Is it the gift (due to no savings) or the amount that he can borrow? In terms of no savings, usually if you are borrowing under 85% LVR (as would seem the case since you are willing to provide the 20% deposit), then most lenders don't need the applicant to show genuine savings. They will allow a non-refundable gift from a direct family member as a deposit. Also if he has been renting for over 12 months at the same place through an registered agent, there are lenders that will use this rental history as meeting the 5% genuine savings requirement. Then there is the option of you depositing money into your brothers account and him leaving it there for 3 months which would then give him the 3 months of genuine savings. As for his borrowing power, I fail to see how the nab person only got $250K. If he is now single and has no debts or liabilities, then he should be able to borrow much much more. I suppose the biggest negative your brother has is that he has no assets to his name which will downgrade his credit score. However he has a decent reason for that. Cheers Tom Re: Home loan for brother 4Feb 13, 2014 12:56 pm The broker idea might be good - one of those that find the best loan for you. But NOT one of the con ones - ie high interest type that are around. Re: Home loan for brother 5Feb 13, 2014 12:58 pm Saint Mike The broker idea might be good - one of those that find the best loan for you. But NOT one of the con ones - ie high interest type that are around. Like Aussie Home Loans. We're not connected to them. We use Credit Union. Re: Home loan for brother 6Feb 15, 2014 1:07 am Hi everyone Thanks heaps for your replies. We have decided to go down a different track. We have decided to buy the house ourselves for him. We have a large amount of cash that we can offset against the loan so we only pay interest on like 20K on a interest only loan. We are going to do this for two years while he goes nuts saving. No paying rent etc. Just save save save. He gets to pick the house he wants, we cover it and when he has done his savings we sell the house to him for what we paid. Seems to be the easiest way. He is looking at a beautiful house by the pictures tomorrow and if all goes to plan we will put in a offer subject to the normal conditions. He is so excited. Caz Re: Home loan for brother 7Feb 15, 2014 12:43 pm Just a suggestion (and I'm not saying your brother is untrustworthy) To get him used to paying a mortgage of the house, why don't you get him to pay into your account the equivalent of what he would be paying in mortgage payments? This takes away the option of being able to dip into the savings (or give them to another woman) at the drop of a hat. After 2 years (or whatever arbitrary time you feel) you give him back the money he's paid to you. He's a winner in two ways: He's learned to budget for the mortgage payments and he's got secure lump-sum. Re: Home loan for brother 8Feb 20, 2014 10:00 pm shackonthehill Hi everyone Thanks heaps for your replies. We have decided to go down a different track. We have decided to buy the house ourselves for him. We have a large amount of cash that we can offset against the loan so we only pay interest on like 20K on a interest only loan. We are going to do this for two years while he goes nuts saving. No paying rent etc. Just save save save. He gets to pick the house he wants, we cover it and when he has done his savings we sell the house to him for what we paid. Seems to be the easiest way. He is looking at a beautiful house by the pictures tomorrow and if all goes to plan we will put in a offer subject to the normal conditions. He is so excited. Caz ^ That's a very very expensive exercise.. 1. You may be liability for CG tax 2. Your brother has to pay stamp duty again Regarding his borrowing capacity, on a 63k income and with no major liabilities and no financial dependents- he should be able to afford a $300,000 loan easily and with a 20% deposit/gift he doesn't need to show genuine savings etc... Michael Chan | Australia wide Mortgage Broker Michael@ShapeHomeLoans.com.au | 1300 74 5626 | Fax: 02 8212 8909 http://www.ShapeHomeLoans.com.au Re: Home loan for brother 9Feb 20, 2014 11:25 pm oncewerefurriers Just a suggestion (and I'm not saying your brother is untrustworthy) To get him used to paying a mortgage of the house, why don't you get him to pay into your account the equivalent of what he would be paying in mortgage payments? This takes away the option of being able to dip into the savings (or give them to another woman) at the drop of a hat. After 2 years (or whatever arbitrary time you feel) you give him back the money he's paid to you. He's a winner in two ways: He's learned to budget for the mortgage payments and he's got secure lump-sum. I agree. This is wise advice. The biggest challenge will be if you take out a loan and then run out of money - you'll have an incomplete security and lenders do not like this so you can get stuck.… 2 19108 Hi, you've probably already resolved this, however, Commbank will probably pay the funds to you after you send evidence the work is done regardless the change in the quotes. 1 35328 How much are you ahead in payments compared to where the build is at? Have you fully drawn down the loan? 5 11930 |