How much annual income do we need to buy a house ( land and house ) valued at $1.2
My husband is self employed
I work for him
We have 4 kids
I can't get a straight answer anywhere ( we have 20% deposit
How much annual income do we need to buy a house ( land and house ) valued at $1.2
My husband is self employed
I work for him
We have 4 kids
I can't get a straight answer anywhere ( we have 20% deposit
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9 Replies
Best way to go about it is apply for a loan and see how much you get pre-approved at. Self employed is always a little trickier and your accountant might need to help you.
You might even get approved for a loan on conditions, such as a guarantor or mortgage insurance. You can get knocked back for mortgage insurance despite being approved for a loan.
There is no straight answer without applying. It's always better to be approved and understand what you can borrow before deciding what you wish to spend.
But basically if you want to borrow 1.2 million you'd need to be earning big, like over $200000
Our combined income would be over that . Probably close to $250000.
Thank you for your tips
Op please do not just go and apply, this is reckless advice.
Seek advice from a mortgage broker as they can provide you this information without you having to apply to any banks and be declined. Keep in mind, once you are declined from either a bank or a mortgage insurer it makes it harder to get your loan approved with anyone else.
What do you have in savings currently? I believe it's approx. $180k annually to be considered however that is based on a lot of factors such as current savings, what your house you are currently in is worth (if you're selling to move). It doesn't matter if you're working for him or elsewhere, as long as you have the evidence you have that secure income.
We have about $260k saved
Outgoings about 4K a month
4kids
We are renting and 1st time buyers .
Thank you for your help
Call a mortgage broker, we went through Aussie and the lady dealing with us was lovely.
A mortgage broker will assist you with this and being self employed is fine, you just need financials and then they will look at your wages, retained profits in the business plus add back items (expenses like depreciation, car expenses etc.) to get a true indication of your actual income versus accounting.
Just remember you'll have to pay building insurance too. It's one of the bigger expenses compared to renting (presumably only contents insurance needed currently). Also make sure you don't have a body corporate fee to factor in on the new property. We're on a similar income and a lot disappears into these sorts of expenses. We have about 600k debt across two mortgages (one is an investment property with rental income) and it's surprising how much money it takes to keep everything afloat. Our kids school is expensive though, so without that our finances would be a bit different. We also pay for decent life insurance and income protection insurance, because if you have a whacking great debt, you need a way to pay for it if you are suddenly in a position where one of both of you are not earning. There are no straight answers to anything in my experience, we have bought three times and nothing is ever black and white. Brokers can be awesome. Decent financial advisers can be fantastic. Anyone who works for a commission should be treated warily, but might also have some useful info. Hope you've found some good info since your post xo
I am amazed at the amount of people commenting with financial advice when they clearly do not have qualifications to do so.
Op do not just apply for a pre-approval to see how much you can get, this is terrible advice and as a result puts a hit on your credit file.... each lender/bank looks at an application differently. Some banks/lenders are better for self employed borrowers.
OP please seek advice from a mortgage broker who will be able to advise you this information, as they are qualified and have a range of tools to find the most suitable lender/product for you. Please keep in mind that your financial position is very different from your friends/neighbours. When your application is being assessed there are different aspects that are taken into account, not just income.
I work in the mortgage industry approving and declining home loans and too often find people receive incorrect advice from family , friends and online which can impact their home loan applications.