Hello all, I'm new to this forum and really came here looking for advice or ideas. I'll give you a bit of the background story first. My husband and I bought a studio in Sydney (Chippendale) two years ago for $240,000 to live in. We didn't have enough of a deposit for the banks being the studio is 32 sqm. My parents went guarantor for us. We have had the studio valued by a real estate agent recently and they advised we could sell it for $340,000. Our home loan is down to $200,000 now and so I would like the bank to release my parents as gaurantors seeing as we have brought the loan down to that level and the property is now worth more than we purchased it for. Do you think they are going to allow this? If not, is there anything we can do to make them release my parents.
The second thing is we may be moving and are considering selling the unit once we know if we are definitely moving. Do you think it would be worth it to have a loft area built in our unit to make the unit larger so that it is more appealing for re-sale or should we just leave it as is?
The studio has high ceilings so a loft area would fit nicely and not take away from the space of the unit. We also have a pull down bed and custom made mirror built-ins. We have lived there very comfortably and so we don't know if we should go ahead with improving the size or not. I look forward to any suggestions or information anyone has. Sorry, if this is a long post and I sound clueless.
If the bank won't release your parents go to another bank (or tell your bank you will). You are undrr 80% even without a revaluation.
Hard to say about the loft without seeing it. But from your description it sounds like it may be a good idea. As long as it doesn't look to crowded or overwhelming as you walk in.
I'd get a few agents in and ask them their opinion. They see hundreds of units and would/should be able to tell you a rough sell price difference for with and without the loft.Look at how much it will cost to build VS how much the price will change to see whether it's worthwhile.
Well done on your purchase. Inner city has done well the last 3 years. I've got one I love. 50% gain in 3 years.
The bank may be able to lift the guarantee provided by the parents if the LVR falls within their acceptable guidelines. Being 32sqm you may have problems still.
Terryw | Structuring Lawyers Pty Ltd / Loan Structuring Pty Ltd
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You will need to approach council and the body corporate about adding a loft. You will definitely need body corporate approval and you may also need a DA from council to make the changes. Also check fire rating requirements, egress routes in a fire, structural certification of the loft structure, BCA requirements for balustrades and stairs- there is quite a few things to check off.
The last thing you would want is for someone to fall down a flight of non-conforming stairs or get stuck in a burning apartment and sue.
Cheers,
Lukeluke86 wrote:You will need to approach council and the body corporate about adding a loft. You will definitely need body corporate approval and you may also need a DA from council to make the changes. Also check fire rating requirements, egress routes in a fire, structural certification of the loft structure, BCA requirements for balustrades and stairs- there is quite a few things to check off.The last thing you would want is for someone to fall down a flight of non-conforming stairs or get stuck in a burning apartment and sue.
Cheers,
LukeExcellent point. I'd be seeking approval from these guys before considering any work. In regards to the guarantors being released – you'll have to give your lender a buzz to find out. At face value, the LVR looks good but that living area is still on the smallish side of things (so will be dependent on the banks policy).
Cheers
Jamie
Jamie Moore | Pass Go Home Loans Pty Ltd
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MissiMoo wrote:Hello all, I'm new to this forum and really came here looking for advice or ideas. I'll give you a bit of the background story first. My husband and I bought a studio in Sydney (Chippendale) two years ago for $240,000 to live in. We didn't have enough of a deposit for the banks being the studio is 32 sqm. My parents went guarantor for us. We have had the studio valued by a real estate agent recently and they advised we could sell it for $340,000. Our home loan is down to $200,000 now and so I would like the bank to release my parents as gaurantors seeing as we have brought the loan down to that level and the property is now worth more than we purchased it for. Do you think they are going to allow this? If not, is there anything we can do to make them release my parents.The second thing is we may be moving and are considering selling the unit once we know if we are definitely moving. Do you think it would be worth it to have a loft area built in our unit to make the unit larger so that it is more appealing for re-sale or should we just leave it as is?
The studio has high ceilings so a loft area would fit nicely and not take away from the space of the unit. We also have a pull down bed and custom made mirror built-ins. We have lived there very comfortably and so we don't know if we should go ahead with improving the size or not. I look forward to any suggestions or information anyone has. Sorry, if this is a long post and I sound clueless.
HI,
Firstly- which bank are you with?? a few banks have recently changed their rules meaning instead of 80% LVR as acceptable “risk” they may want the LVR to be as low as 60% before they would allow your parents to be release.
If it comes down to push and pull…you can alwasy refinance as well to a lender that allows a higher LVR- hence releasing your parents from the security + possibly drawing some equity to fund for some of the renovations.
Generally speaking on a 32 sq meters with no car space and balcony space included – your max LVR would be 70%; if your an existing client of CBA or ANZ they may push it to 80% ( but unlikely – as releasing your parents security has no advantage for the banks)
About the price…i currently have a 1 bedroom + study investment property also in chippendale…and it’s a on the good street as well ( start of Regent street- next to central/ office of marriage and birth etc) …prices in the city influx quite a bit- do your own research dont trust the agent to much…..i bought mine in 2008 for $420,000 end of last year the agent said it would go for $580,000 min— placed it on the market for 3 month …and the highest offer was $495,0000
banks value come back as $485,000….Chippendale has dropped a bit leading up to this year; due to over development and over supply of units currently…but it will pick up as demand in the city are quite high— so i say hold off on the sale for a bit till the market improves… especially when rates are expected to drop…(according to westpac)
Lastly about the Loft- i say dont waste your money or time on it;
1. you need DA approval + strata…will cost you quite a bit + construction – the amount of $$ spent on something that doesn’t add a lot of value .
2. It will make the place look even SMALLER with the extra clutter and walls etc…P.s I didn;’t end up selling my unit, due to the value….and it brings in rent of $680 per week…so no rush to sell.
Regards
MichaelMick C | Shape Home Loans
http://www.shapehomeloans.com.au/
Email Me | Phone MeSame Banks. Better Rates. Served With a Passion.
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