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Hi
I’ve been working in mortgage broking and management for nearly three years. I also assist my clients source out properties, I may be able to help.
Your bank or mortgage broker normally, will give you an indicative figure on what you can borrow based on your income, your existing level of debt, the deposit you have available to use for the purchase, the projected rental on the new purchase and of course the area and type of dwelling you intend to buy.
Going by your message, you obviously have all the information, except the location or type of property?
That’s easy to fix, as I am sure you have an idea of what you want to purchase, in addition you also have an idea of the of cashflow you have available to fund the ongoing investment costs.
These are your starting points. So let’s say you have $100 pw to spare then you know that you can contribute $100 pw towards this property(ies).
If you don’t want/can’t contribute anything then you need to look for cash positive/neutral properties.
Then your other critical points are your needs/wants out of property investing. Ie: capital gain or cashflow.
These are indicators to help you determine the type of property you should start to look for and of course the location.
Now back to lending, you should always get a finance pre-approval before you seriously start hunting down a property. Immagine finding a great property and someone else will beat you to it because you are not finance ready!
There is no problem getting this as the pre-approval would be subject to valuation.
At worst if the lender that gave you the pre-approval will not accept the property you have chosen, a good broker should be able to get you finance through someone else.
I hope this helps. It’s easy:
1)Determine your cashflow
2)Determine your needs/wants
3)Determine your location preferences
4)Obtain a pre-approval
5)Start a serious property search.Good Luck
Maria
Originally posted by jennym:We have decided it’s time we bought our first IP although we are in our 50s, I believe it’s never too late to start.
I’ve been reading as much as I can from Craig Turnbull’s books and what I can find through some property forums online and the like.
My question is, when we approach a Mortgage Broker or the Bank, do we get an approval for loan of $xxx and then only look for properties up to that amount? I’m a bit confused regarding how much we can borrow, when we haven’t chosen a house, yet we can’t choose a house until we know how much we can borrow!!! If the approval is for say $200k and the house plus expenses only comes to $180k have we then borrowed $200k or $180k.
I’m also a bit confused about our equity in our owner/occupied house. Several years ago we took out a LOC using the equity to purchase some shares. When talking to a broker last week it seems the $80k LOC was deemed as being a loan which comes off our LVR.
We’re keen to look at purchasing our first IP within the next few months but need to feel at ease about how this works first. As you can see, we’re from the old school and haven’t borrowed from the bank in nearly 30 years. What a learning curve this is.
Cheers
Jenny
Thaks for your interest.
I am at a very early stage and being new at it I am trying to put all the theories in practice. I have not finalised an area nor found all the necessary professionals in place.
Time and resources are short. But I am determined.
I will get in touch when I have some figures together. In the meantime if you can suggest how to find the right people in an area to help all things like: building inspection competent lawyers etc would be great.
Thanks all the same and I’ll be in contact.
M
Hi
I am also interested.
Jasonv
She can contact me. Thanks.
M
Hi
It’s quite confusing when you start, which way to go?
The answer is quite simple. Two important factors are going to determine what to do:
Firstly you need to work out your finances, for exhample do you qualify for an owner occupier loan or investment property loan?
Therefore approach a good broker I don’t usually recommend to approach a lender as they usually are in business to give you a loan not to spend time with you and work out the best solutions for YOU.
Secondly once you know what you can borrow and for what purpose, you need to know are you going to make a financial decision or an emotional decision. You see when you buy a home to live in it’s an emotional decision, for investment purposes it’s financial decision.
Usually if your’re short on income and deposit it’s easier to qualify for an investment loan as you’ll have an additional income helping you out. In addion the tax benefits usually also help in meeting your commitments.
With an owner occupier you don’t have the benefit of the above, however you have your own home.
Having said all that you may discover that you can do both. Who knows?
Hope this helps.
M
