Hi,
My husband and I have recently stumbled across Steve’s book and are interested in investing in property. The problem is we have no money for a deposit just yet and have 2 car loans and a personal loan to pay off first. Our plan is to pay these loans off by the end of the year and squirrel away what we were paying on them, which is much more than the minimum payment, in order to get as big a deposit as possible. My hubby works a stable job but his annual salary is peanuts, I’m a stay at home mum to our three kids and do not intend on working until next year. We live a simple lifestyle and only spend within our means. The thing is that there is a property we know of that we believe is a steal and would love to buy it but have no money for a deposit. What would you do? Wait till all other debt has been paid off and you’ve got a hefty deposit? Or what?
Thanks
I forgot to mention, we do not have a mortgage or pay rent, so are in a good position to save….
Hi Sha
Welcome to the forum and I hope you enjoy your time with us.
Do you own your PPOR outright or are you currently living with friends or relatives ?
If you own your home outright then a deposit would not be required as you could structure the new loan to ensure you borrow 100% plus all of your acquisition costs.
Depending on the rate of interest you are being charged on the personal loans i would probably incorporate these as a sub loan at a lower rate of interest as it will improve your serviceability.
Cheers
Yours in Finance
Richard Taylor | Australia's leading private lender
Hi Richard,
Thanks for the reply. We are currently living with family. Thanks for the idea about incorporating the loans as a sub loan to improve serviceability, didn’t think of that. Will weigh up our options.
Sha
Hi Sha,
Yes, a big welcome to you and hubby. You will have already seen from Richard that there can be “lots of different ways” to do things. Some work better than others of course, and some work for one couple, but may not work so well for another. The whole subject is quite complex – and there is where we need the knowledge of people like Richard and a host of others on here.The good news is that 1. You are here, and 2. You are asking questions. So, where to next?
Well, I wanted to introduce you to my “Big Picture” thread that sets out to answer a lot of the early questions that new investors have. Some useful things are “Do I buy a PPOR or an Investment Property first?” and then there are financial things that are discussed, and how/when/where to buy properties. So go make a cuppa, then sit down to tackle this thread:-
https://www.propertyinvesting.com/topic/4410491-the-big-picture-for-new-readers-especially/
You might want to “skim through” and only reading what seems of interest to you. And that is fair enough. Just be sure you do go back later to pick up on the other stuff that “sounded complicated” as these will all help you to learn to make better decisions. It will also help as you will be more familiar with some of the words and phrases for when you sit down in front of a Mortgage Broker to discuss your situation.
Anyway, again welcome – now go enjoy that cuppa and the read !! ;)
Benny
Sha, sorry don’t want to burst your bubble but I had assumed you owned your own home unencumbered.
If you do not have equity / cash saved deposit you won’t buy an investment property.
You will need 10% deposit plus acquisition costs as a minimum.
Then of course your credit score with a car / personal loan will not be good.
You will need to pay these off first i hate to say.
Cheers
Yours in Finance
Richard Taylor | Australia's leading private lender
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