Reports which aren’t based on reality get quite boring. Fact is that most first home buyers:

1) do not necessarily NEED to buy a median property for their initial purchase
2) do not need to save 20% for their first deposit

But I guess it wouldn’t be as interesting to write a report on couples taking 18 months to save for a deposit to provide one of the most basic requirements in life – a roof over their head (that they own).

That’s correct – they certainly can foreclose and or require you to take on the debt. If this fails it will be on your credit file and can bring your personal assets into the mix.

Are you signing as a borrower or as a guarantor? Why does your nephew need you on the loan – doesn’t have enough deposit OR not enough income?

That’s correct Ronnie. This opens options for flexibility in taxation and lending options.

DeanCollins wrote:

Agree Benny, this whole APRA 10% investor limit is being used as a rort by the banks to push up their profit margins.

Meanwhile they forcefully shed market share and have reduced profitability from higher deposit requirements.

As mentioned above, still lots of options for credit impaired – dependent on the circumstances the results can arrange anywhere between marginally more expensive than mainstream credit to extortionate.

Generally first step is to get any debts paid out – ongoing unpaid defaults aren’t going to help you.

• This reply was modified 9 years, 1 month ago by  Corey Batt.

So long as the loan is interest only, the repayment will automatically adjust to the net figure achieved against any offset account balance.

Almost universally a superior option, especially if its a principle place of residence which you may turn into an investment property.

Interest only with offset leaves you with the greatest flexibility regardless of the situation. The only time I’d suggest it may not be the most suitable is if the borrower doesn’t feel they can trust themselves with large sums sitting in their offset without using it.

Counter to Mikal, I’d still say even in an owner occupier situation it’s not a bad idea if you may be an investor – you never know if you may make the existing PPOR as an investment property. I’ve seen too many young couples in particular upgrade from their first rung house and have a poorly structured setup from paying down their debt too much.

A strategically planned lending structure will outperform any one lenders maximum borrowing capacity. Generally we find a carefully structured structure can extend your borrowing capacity 1.9-2.5x any one lenders max capacity.

Speak with an investment focussed broker who can look at your situation from a holistic perspective.

They most certainly DO NOT just lend 80% of the purchase no questions asked, furthermore the new debt is stress tested at a far higher rate than you’d actually pay at the current time – you’ve certainly been given a bit of wrong information.

Reasonably balanced article which has touched on what I have experienced with my portfolio, and likewise what I’ve seen a lot of client’s portfolio’s go through.

Fundamentals stack up well if you understand the local tenant requirements – @dtraeger can touch on this no doubt. No point having a deluxe semi in Davoren Park..

Running on quick numbers, the last 10 valuations I’ve put through in the Playford area have had a range of 10-35% increase since last valuation OR purchase, note the upper end is usually from short term purchase with renovations so a bit of a distortion. Generally with the purchase/reno properties I buy have a post reno increase of 24-29% increase after purchase price + costs.

A couple weeks ago I ended up at over at the commercial precinct at Playford Alive – quite impressive in size and quality. Gone are the days of cheap construction – real money is being invested in the projects:

Would I invest directly in the Playford Alive (Munno Para) section specifically? Not really. Supply will keep the prices tempered, so I will continue to focus on the medium density zoned old trust areas with 8%+ yields and development potential.

• This reply was modified 9 years, 1 month ago by  Corey Batt.