Pay As You Go (PAYG) Income Verification Requirements

If you are a first-time home buyer, an investor or you are looking at buying another home to live in and use as your primary residence, you need a home loan. And, when you apply for home finance solutions, lenders ascertain your financial condition by taking a look at your income.

The Need of Income Verification Process

In today's working environment, people move jobs more frequently to multi-skill themselves or for better working conditions and benefits. In some job categories, employment contracts are arranged and set for a number of years, and casual employment is also on offer.

Income verification is a key criterion used by lenders/credit providers when they assess a person's suitability for a home loan. The process is required to establish whether or not you can afford the repayments, and it is incumbent upon lenders/credit providers to act responsibly when assessing a home loan for approval.

Documents for Income Verification

Examples of the type of information that you may need to provide for your verification of income include:

• Your latest pay slips

• Your recent payment summary (Group Certificate) and Income Tax Return, and

• Confirmation of your employment

Income and Expenses - "Serviceability" Calculations

In order, to determine your ability to meet your loan repayments, the lender/credit provider will use your current yearly salary as a benchmark, and they will perform a calculation known as a "Serviceability" calculation. The calculation will assess your ability to repay your home loan, both now and in the future. Most lenders/credit providers may consider your bonuses, overtime, etc. when determining your income, and they will use the following percentages when calculating your income:

• Salary wages - usually 100% of this figure

• Overtime - usually 50% of the average income, if consistently earned over 12 months

• Bonuses - if consistently earned over two years

• Rental income - up to 75% when received as income (this allows for untenanted weeks)

• Investment income - this includes interest and dividend income if regularly received over two years

• Family Allowance - Centrelink benefits may be used in the calculations where dependents are under the age of ten years

In addition to determining your income, you current expenses will be considered for determining your ability to meet your home loan repayments. Your expenses can include:

• Other loans - Your monthly repayments for any loans not being refinanced

• Credit Cards - This includes the "limit" of your credit cards (not the balance outstanding)

• Living Expenses - These are expenses that can be associated with living life on a day-to-day basis, and are meant to include things like food, insurance, utility payments, clothing costs and education expenses, etc.

Most lenders/ credit providers will consider the following PAYG employment types when assessing a person's suitability for a home loan:

• Permanent Employment - You should have a minimum of six months in your current employment. If you have less than two years in your current employment or you are on probation, you will need to demonstrate two years’ employment in a previous job and the same industry

• Permanent Part-Time Employment - You should have a minimum of 12 months in your current employment

• Casual Employment - You should have a minimum of 12 months in addition to your normal employment

• Contract Employment - You should have a minimum of 12 months in your current employment

• Second Job - You must have two years of continuous history in the position

So, now that you know about the income verification process of obtaining a home loan, it will be easy for you to keep all your documents ready. But, don’t worry if you are confused about your income, expenses or any other thing, you can employ the services of an expert finance broker to help you with your home loan. He/she will understand your situation and provide you with optimum solutions and help you in managing the loan process effectively and successfully.

Singh Finance is an Australian finance brokerage firm that has a team of best finance brokers. The firm is your one-stop solution for obtaining deposit free home loans, property development finance or best commercial loans. Call on 0424 190 908 and get ready to avail expert help and lower interest rates.

Answers to All Your Questions Regarding Non-Residents and Temporary Residents Living in Australia and Wanting a Home Loan

Australia is an attractive destination for investors. Many potential migrants (non-residents and temporary residents) are eager to invest in real-estate market of the country. But, they do not fully understand that "Australian Visa Requirements" must be satisfied before they can consider borrowing funds to purchase a new or used home, or investment property in Australia. So, before you start applying for a loan, here are a few things that require attention of every potential investor.

Visa Subclasses Preferred by Lenders/Credit Providers

It has become increasingly evident that lenders/credit providers will normally prefer to lend to any of the following Temporary Resident Visa Subclasses:

• Subclass 457 - Temporary Business (Long Stay) – Standard Business Sponsorship

• Subclass 405 - Investor Retirement Visa

• Subclass 415 - Foreign Government Agency Visa

• Subclass 426 - Domestic Workers Visa

• Subclass 995 Diplomats Visa

• Subclass 422 - Medical Practitioner (Temporary) Visa

Diverse Home Loan Application Process

All Visa holders are assessed differently, and the process will depend on the type of Visa holder you are. Interestingly, lenders/credit providers have identified that the most common types of Visa holders applying for home loans are:

• Visa holders on Spouse Visas (subclass 309/100 and 820/801), and

• Visa holders on Temporary Business (Long Stay) – Standard Business Sponsorship Visas (Subclass 457)

Security Types Considered by Lenders/Credit Providers

Here is a list of security types that you can consider. However, it is important to note that any dwellings must have never been occupied or been previously sold:

• To buy vacant land, so long as you start continuous construction within 12 months

• To buy units, townhouses, and house/land packages

• To buy existing residences for redevelopment as long as:

>> the development will increase the supply of housing

>> the land remains unoccupied during redevelopment, and

>> no more than 50 percent of the dwellings in any one redevelopment are sold to foreign investors

Important Factors considered by Lenders/Credit Providers

Once you get your Australian Visa, you can apply for a home loan. It is always advisable to seek help of an expert finance broker who specialises in getting home loans for temporary residents and non-residents.

The finance broker you employ for your services should have a thorough knowledge of what the lending policies and standard requirements are for specialised lenders.

He/she will prepare a "Home Loan Checklist" to help you understand what factors the lenders/credit providers take into consideration like:

Residency Status: The time remaining on your Visa, your Visa conditions, and the country you are a citizen of

Genuine Savings: You must be able to prove that at least 5%of the purchase price is being saved in an account in your name. And, the other funds can come from any other source including a gift from your parents overseas.

Employment: For some lenders/credit providers if you are:

• Borrowing 80% of the property value, then you can be in your current job for as little as one day, or

• Borrowing more than 80% of the property value and up to 90%, then you may be required to be in your job for six months or more

However, if you are a permanent employee, you are held in a higher regard by the lenders/credit providers than if you are a casual, a contractor or a temporary employee.

So, don’t worry about getting pre-approval on home loans for non-residents and temporary residents. An expert finance broker will do all the hard work for you to make sure you get a quick pre-approval. So, it is ideal to employ the services of a reputed finance broker as he/she will save you all the trouble of establishing if your Visa requirements are met and to find you the best home loan deal.

Singh Finance is a reputed Australian finance brokerage firm that has a team of expert finance brokers. The firm specialises in getting new migrant home loans for temporary residents and non-residents of Australia. Our team of expert finance brokers will even help you in finding cheap commercial finance for your business. Call on 0424 190 908 today.

The Easy Guide for Obtaining Trust Loans with the Help of Professionally Qualified Finance Broker

A trust structure is popular because it provides advantages like asset protection and tax minimisation. So, many people opt for it. If you want to establish a trust, you must first speak to your accountant and solicitor to take advice regarding the structure of the trust including legal and tax implications. Whether you choose a discretionary trust, family trust, unit trust or a hybrid trust, your accountant or solicitor will be able to guide you in the right direction.

You must remember that different types of trust structures are assessed by a lender/credit provider in different ways, for example:

• Some lenders/credit providers are more favourable to discretionary trusts and family trusts and

• Few lenders/credit providers may favour hybrid trusts and unit trusts

Once you have established a trust and want to make an investment property purchase, you can apply for the best trust loans. Here is a list of documents that a lender/credit provider will require:

• A certified copy of the stamped Trust Deed

• A certified copy of the Company Constitution ( if it is a Company Trustee)

• Tax Returns and Notices of Assessment for the Trust (unless it is a new trust, or if the trust is applying for a low doc home loan)

• Identification for all Trustees, directors of trustees and beneficiaries of the trust

A lender/credit provider will also perform credit checks on all the beneficiaries who will become guarantors, plus any business entity that is linked to the borrowing or who have an association with the borrowing trust and the directors for the entities.

The Role of Expert Finance Broker in obtaining Trust Loans

Many mortgage brokers, lenders and banks do not have complete idea about all the types of trust structures. So, they hesitate in offering quick approval on trust loans. So, it is important to choose a professionally qualified and expert finance broker for managing your trust finance process.

If you choose an experienced and well-reputed finance broker, he/she will:

• Understand your financial needs by working closely with your accountant and solicitor

• Ascertain your current financial situation and devise an optimum strategy for you

• Ensure that you meet all the lender’s requirements

• Provide with various loan options

• Help you in choosing the best trust loan option

Truly, an experienced and professionally qualified finance broker can prove to be blessing for borrowing under trusts. So, next time you start looking for obtaining trust loans, don’t forget to employ the services of an expert finance broker.

Using an experienced finance brokerage firm like Singh Finance for obtaining low rate unit trust loans is a clever strategy. The firm will help you in obtaining quick discretionary trust loans. The firm’s expert finance brokers will understand your situation and provide you with right solution. Call on 0424 190 908 or enquire online now.

A Construction Loan can make Your Dream of building a New Home a Reality

The idea of building your dream home can be both very appealing and very exciting. If you are deciding to build your dream home, there are a lot of things you need to consider prior to commencing your building project, for example, you may have to decide:

• Do you want to demolish the existing home you live in and re-build a new home?

• Do you want to purchase vacant land and construct a new residential dwelling on the purchased land?

• Do you have ready cash available to cover the construction costs?

• Do you have to get a Construction Loan (also known as a Building Loan or Construction Mortgage) to fund your building project?

• If you are a first home buyer, you will have to find out about the Government's First Home Owner Grant Scheme

Once you have decided on the above-mentioned factors, you will have to start your work on construction home loan or real estate finance which is secured by a mortgage on the property being financed.

Lenders/credit providers have different construction time frames and drawdown schedules that they allow for construction loans. However, most are similar, and here is a quick synopsis of how a construction loan works:

• The lender/credit provider will fund the loan amount required by you to cover the cost of purchasing the land and for the building construction costs

• He/she will break down the loan amount into progress payment amounts drawdown, which are made to your builder as each stage of construction is completed

• He/she will require the construction of your new dwelling to be completed in the short-term (usually from 6 months to three years)

• He/she will take required real estate security by securing a mortgage on the property being financed

• He/she will charge Interest Only during construction (interest is only calculated against that amount which has been drawn down)

If you are interested in a construction loan, then my best advice is to get a pre-approval with the help of an expert finance broker. He/she will help you to know and understand:

• How much disposable income you will want?

• How much will your building project cost?

• How much cash (down payment) do you have to put into your building project?

• How much can you afford to borrow?

• Where can you score the best construction finance deals and products?

• If you are eligible for the First Home Owners Grant scheme as a First Home Buyer?

Once you discuss these things with the finance broker, you will be able to judge your financial situation in a better light. It will aid the broker in finding pre-approved construction loan packages for you. You can start looking for a new location to build your dream home, or you can look at demolishing the existing home you live in to re-build a new home after obtaining pre-approval.

Singh Finance not only helps individuals in building their dream home but also ensures that builders secure quick development finance for building projects. The firm is experienced in handling loan requests of different types. So, don’t worry if you want a low deposit home finance or low document home loans package. Call on 0424 190 908 to discuss about pre-approved home finance.