Did you know that having less than 12 months’ in your current job role can reduce your home loan borrowing power? Neither did Sam and Jane!
Luckily, with some help from mortgage broker Azita Bokan, the Sydney permanent residents were able to buy their first home.
The Story
Sam and Jane become Australians
The married couple migrated from Turkey to Australia in 2015 on temporary visas (which has since been replaced by the TSS visa).
After two years, the IT professionals applied for permanent residency via the Sponsored (Migrant) Visa (Subclass 176).
Having secured their PR visa, they were in a position to borrow up to 95% of the property value to buy their first home.
However, Sam and Jane were unaware of this and happy to continue renting for the time being because they were planning to take some time off to travel around Australia.
Same and Jane take a holiday
The couple eventually decided to bite the bullet, quit their jobs and road-tripped for two months over the Christmas and New Year break.
They had enough savings to get by, no children and knew that with their experience in information and communication technology, they would have no problem getting a new job.
They came back from their travels surer than ever that they wanted to build their life in Australia.
First home, a developers’ dream
The couple began the hunt for their first home and spoke to Azita first because she had recently helped a family friend of theirs.
Azita was not only an experienced mortgage broker but had a background in real estate and conveyancing.
Having also built a property portfolio, she could assist the couple through the property selection and home buying process. Azita, the one-stop shop!
Sam and Jane know they found their first home in Killara, Sydney, a 2-bedroom property on nearly 2,000sqm of land.
It also happened to be built on one of only two sections of the Pacific Highway that had been approved for mid-density development by the Ku-ring-gai Council.
That meant the property had DA approval to be knocked down and rebuilt into a multi-unit dwelling (up to 5 units max).
Azita was able to order a free property valuation from one of our lenders that confirmed the $700,000 advertised price.
She estimated that the property would be worth close to $1.5 million after 2-3 years on the market, so the security wasn’t going to stop them from getting approved for a home loan.
Their first home was not only situated near the beautiful hinterland of the Ku-ring-gai Chase National Park, but it was also a developers’ dream.
8 months’ history a prickly problem
Sam and Jane had been working for around eight months in the same company by the time they found their first home.
They saved up a 10% deposit for the purchase but, unfortunately, most lenders would limit their borrowing to 80% of the property value because they had been in their roles for less than 12 months.
Sam and Jane knew the property wasn’t going to stay on the market for long, but Azita advised them not to pay a deposit until she was sure that she could get mortgage pre-approval. Smart move!
Try the new job calculator to find out if you qualify for a home loan.
A clever solution
A strong case saves the day
Sam and Jane had been permanent residents for about 18 months and were earning great incomes.
They had a good savings buffer, lived within their means and had a clear credit history.
What they also had on their side was their work history before taking two months’ off leave.
So their residency status was not an issue and highlighting their key strengths and reliability as borrowers allowed Azita to build a strong case with a second-tier lender.
This lender normally considered lending 80% to borrowers with less than 1 month in a new job and, in some cases, just one day!
However, Azita was able to get an exception and allow the couple to borrow up to 90% of the property plus the cost of Lenders Mortgage Insurance (LMI).
By capitalising the cost of Lenders Mortgage Insurance (LMI), Sam and Jane could avoid paying the substantial premium upfront.
For the remaining purchasing costs, such as conveyancing costs and legal fees, they were able to dip a little further into their savings and Jane was able to get a small loan from her family back home.
A happy ending
A fast approval
After pre-approval, Sam and Jane paid their 10% deposit and expected to wait close to four weeks to reach home loan settlement because it was close to Christmas.
Thanks to her relationships with the key decision-makers at the lender, Azita was able to reach settlement in just two weeks.
She also negotiated a sharp interest rate on their behalf.
Sam and Jane move in
The couple is enjoying their new home in Ku-ring-gai, and the many trails peppered close-by.
All things being equal, they also stand to make a solid return on investment when they decide to sell and upsize their home to start a family.
Do you need help getting approved for a new job home loan?
Call us on 1300 889 743 or fill in our free assessment form today.
Azita and the rest of our mortgage brokers are credit experts who understand how to get tough loans approved.