Forum Replies Created
Dear Alex,
If you are going for 20% deposit then there are many lenders and most appropriate lender is easy to find.
Dear Dyna,
It will be good to appoint a mortgage broker in his situation.
You may be able to get lenders which will accept the company title, This will attract more legal scrutiny. Hence you may need to pay more application fee then normally. That is the reason it will be good to keep this tow loans apart. Refinance the IP then take money out of it and use this money in acceptable way into new property. The acceptable money transfer is bigger issue then getting a lender to company title.
Dear Alex,
Sorry as the question was incomplete I was only able to answer based on information provided.
All the best for the deal.
Dear Magic32,
For your Question
"would the borrowing capacity be less or the same with two part time jobs vs the same income with one full time job?"
Clear answer is no.
Hi Chris,
You definitely need someone how can help you draw a business plan as builder, this business plan will have above points as starting point but need more detailed as this is big step. The above points will allow you to consider even before employing someone for business report.
I myself has gone through this question in near past for my property.
After investigation I decided to keep the property for a while as zoning has recently changed. New rules has not allowed property values to settle on higher side. Property value are increasing at 25% per annum and may continue for a while. It may be profitable to sale after a while then take a risky option of construction now.
Hi Lea,
First of congratulations for finding the hidden gem in your life.
Take one step at a time. Settle in life with no property hassles. As properties are positively geared and you do not need money now.
Be on look out for better options in property such as positively gears and positive capital gain but have your tax also. Think of buying properties in SMSF and get ready for less tax regime may be option. Have detailed consultation with Financial planner.
Dear Magic32,
I have mentioned Earnings and not taxable income, the earnings include allowances which may not be taxable. I have not seen in banks' or lenders' serviceability calculator asking for profession. The serviceability calculators are used for calculating borrowing capacity.
Dear Alex,
I have not seen in your Question Block of units as security. Did I miss something?
Dear Magic32,
Your borrowing capacity is not dependent on type of job but earning. Lenders generally look at stability of job in terms of current employer i.e. you are with employer for how long and current profession i.e. how long you are in same profession.
Hi Benny,
There are few lenders offering offset account along with fixed interest rates. This allows you to lower your total interest paid reduce at the same time it is great as it allows you deduct full interest you might have paid if there was no offset account. Best is you can use you offset money at any time to invest in another investment loan.
Hi Daniel,
It is good to know that you will be using your numbers for due diligence and avoid risk, Other use can be to compare the performance of two properties or expectation of performance over the period of time.
You need to include impact of your tax bracket, strata cost and money in offset account reducing potential interest but still allow to deduct full interest on loan. These are real life considerations.
The formulae became more complicated.
Hi Daniel,
All this numbers even if they are correct, they mean nothing if do not use them properly.
They are used for what in your case?
Some of them are historical and some are current and some are futuristic.
Hi Chris,
There are few parameters need to be considered.
- The development rules and zoning.
- Quality of homes in near by and likely cost of construction.
- The value after construction and potential profit after interest and tax
- Benefit you might have based on sale value of property now and not have to pay tax as it is primary home.
- Can you get loan for construction based on your age etc.
Hi Benny,
I like to bring back the discussion on the financial.
Have you done sums for positively geared property for short term cash flow. and also potential for capital gain in property over the period more then 7-10 years.
I like the point of
"strong infrastructure nodes around and LGA spending lots on local upgrades due to population growth anticipated in future years"
You should look at the potential sustainable population growth.
Good luck
Hi Mattliasiian,
Let us develop in the discussion.
My two penny
- Potential cash flow now based on rent and out going and tax
- Potential capital gain in future with time span of 7-10 years and growth to double up.
Hi Ash88,
Please confirm What I am understanding is as below is correct.
Todays condition
Owner occupied property valued at $400k , Value at start of loan was $320k remaining loan 250K offset account balance 250K.
Cash other then Offset account 87K
i.e. Net Asset $487K
Planned
At the time of purchase of IP gift of 200K
Net assets $487K+$200K=$687K
After buying the IP valued at $500k
Assets valued as $400k Home + $500K IP = $900K
Deposit paid 20% =180K
Cost of buying 20K
Money in offset account = $687K-$200K=$487K
Loan remaining = 900K-180K-487K=233K
Loan payment about 13K
Rental income frm IP about 25K
net rental gain = 12 K
Living expenses 12K
Net saving none
After 3 years
Property appreciated value …/.
Cost of construction
After 4 Years
sold the property or keep on rent….
Hi Stevebull74,
What are you aims? How you want to achieve this financial aims?
Why one method over the other, have you based on your strength and weakness?
Then choose your team to help you achieve what you like to achieve.
Hi Alex,
If you are considering of option of 15% or 20% deposit, then It may be worth while to consider total cost of funding over the period of 5 years.
I agree if you have only option of 15% deposit then the city bank is more appropriate then others as it does not attract Lenders Mortgage Insurance.
Hi Newbie,
I will look at the goal you want to achieve by buying a property and your potential to go in property market.
The OTP are good when you definitely know the area is coming up due various reasons mentioned by Mark.
- You have comparatively low capital now but likely to build over the period of completion due to gift, bonus etc.
- You are able to play with extra money and have long term plan to live in place or sure of good rental income.
- Want to lock in the grants available for property investment.
This many a times boils down to details of the situation you have and what you can afford.
Dear Renren,
Please be careful negatively geared and positive cash flow property are more preferred then just negatively geared and negatively cash flow property.
