Hi guys
Im very new to property investing and need some advice. heres my situation.
Im currently working fulltime only netting about 600wk. I wish to get out of renting and buy my own unit. I have have no major assets, a clear credit record. My mother currently owns a unit worth around 320k, and is looking at selling but doesnt know when. She would like to help me but doesnt really know that much about investing either.
There is a chance when she sells her unit she will give me around 60k which i could use as a deposit for a unit, i am looking in sydney cbd. However, is there any options for her to use her current unit to invest in a unit for myself and i could pay off the mortgage. After she purchases the property could she transfer it to my name. Is the mortgage transferrable? Could i secure a lo doc homelone with say a 60k deposit on around 200k loan easily?
Just basically wondering the best way for me to end up owning a unit in sydney, based on the scenario above. Just need a kick in the right direction i guess.
Thankyou so much for your time
There are a couple of options but the bottom line is that until your mum sells and releases the equity as can give you a gift of $60K cash, you will be, in effect, repaying a loan of about $196K (Stamp duty, conveyancing added less $14K first home loan grant). Repayments on a $210K loan are around $322 per week plus rates of about $28 pw and strata fees of at least $20 per week. This means that out of a $600 take home pay, you will have $230 to pay electricity, fuel, food, insurance etc.
If you were able to live with your mum for a 6 months and save $370 per week, you would be and extra $9620 in front and should still be able to buy a unit before 30 June 09 and get the $14K grant. This would also give you a good idea of what it is really like to be committed to a loan of the size you are considering.
Personally, I would prefer to see if you could wait until she sells or live with her until she sells (whilst saving hard) as this will greatly lessen the amount you would need to borrow. This is if you can live together harmoniously!
Never under estimate the stress and hardship that comes from being financially over committed. However, that said, a little bit of hardship builds character and will allow you to get into the market.
Back to you original question… Your mum could get a line of credit for $60K which you could agree to repay as well as the repayments on your home loan. This is a bit risky for your mum, should you default on your repayments. Or, your mum could use her unit as security to allow you to borrow the full amount – again, very risky for your mother. I am sure the financial gurus in here will respond with some other solutions or correct me if I am wrong.
imaginaryhero
Hi, above is a good start .
Some other ideas – not sure of lots of details so probably not that accurate for you.
– If your Mum's situation is OK with not needing all her money at once. Can you buy half her unit thus giving her some money and a start for you – you will miss out on FHOG this will mean only a small loan.
– unsure of what your prices are or how much rent you are paying at the moment. or do you have a family etc. Maybe you can buy with a fried on 50 50 basis?
– or buy and rent out spare room for extra cash for repayments.
– lots of people nowadays buy and live in house for 6 months or so, then rent out and go back home for cheap rent and then can claim all expenses on their house.probably lots of other ideas. lets get the forum suggestions running.
good luck.
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imaginaryhero
you are wanting to purchase a unit to live in?
if so, you can use your mothers property as security as long as she provides a supporting limited guarantee at a specific dollar amount. You can borrow 100% of the purchase price but with the guarantee the LVR drops down to 80% so you also avoinf lenders mortgage insurance.Contact me if you wish to discuss further and can point you in the right direction
Cheers
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