Hi again dragaonflyz

I don’t see a problem with 95% lends. Some people aren’t comfortable with them but they don’t personally bother me – I like to use as much of the banks money rather than my own. However, as mentioned above – they are scrutinized a lot more heavier.

From your first couple of posts I read that you only had limited savings ($35k) so where are you getting the deposit for IP 2? Even on a 95% lend, IP 1 will swallow up a fair bit of your savings. Not leaving you with enough to cover the deposit/purchasing costs on IP 2.

Actually, it makes me wonder how your broker was going to organise a preapproval for $780k when you only have $35k in the bank.

Cheers

Jamie

Yep, it’s an awesome place

OK – your broker should have a good understanding of your current financial situation and therefore know how much you could potentially borrow in the future. You mentioned that this loan is only conditional at present – for that reason, I would probably steer clear of getting a pre-approval right now (and wait until the loan settles). Remember – each pre-approval is another hit to the credit file. You don’t want to make any lenders nervous right now when there’s a 95% deal on the table (which are heavily scrutinized). My advice would be to settle IP 1 first.

When is settlement expected for this property? Since it’s a house/land package it might be a while – therefore, you won’t receive “formal” approval from a bank until closer to the date (around 3 months before settlement).

It doesn’t sound like you have any equity you can tap into. If you’re taking out a 95% lend now – you have no equity to access. Unless you’ve purchased significantly under market value or you add a fair bit of value. You’ll only be able refinance at 90% LVR as well.

No one can answer that question without analysing your situation more closely. Even then – the decision comes down to the lovely credit assessors and mortgage insurers. If you’re thinking about taking out another high LVR loan soon, it might be an idea to avoid pre-approvals as you really want to keep your credit file tidy (too much activity on a 95% lend could have the deal knocked out when it’s submitted via credit scoring).

It’s certainly achievable – 5 years won’t be easy, but there are people who make it happen.

No worries – and I don’t mean to sound negative, just giving my honest insight.

Cheers

Jamie

I’ve been in a similar situation and received the same advice – as long as the sheet wasn’t broken, then it should be fine.

Cheers

Jamie

Hi Rich

Welcome to the forum.

Your question regarding where to purchase outside of Brisbane is extremely broad. You’ll have to do some ground work – read up on forums like this, grab some books/magazines and begin educating yourself about what to look for when investing in a particular area.

To qualify for the FHOG you usually have to live in the property for 6 months within the first year.

Cheers

Jamie

Totally agree with Terry – you shouldn’t pay off an IP debt if you have a PPOR debt.

The rent received from your IP will be added to your taxable income – and because you’ll have no interest to claim (if you pay it off) then it will be positively geared by quite a bit (because you only have other expenses/depreciation to claim).

Cheers

Jamie

Hi Dennis

I’d pick a couple that you’d be generally interested in having manage your property (unless you opt for self management) and let them know that you’re on the verge of purchasing a property within a particular area and you’re considering using their services. Generally, they’re happy to spare a few minutes to answer some questions.

Cheers

Jamie

Yes – it would just be treated the same as any investment property that’s why it’s important to track income and expenses.

Cheers

Jamie

Hi Zeus

It’s pretty straight forward.

As you’ve already mentioned, you can engage a real estate agent to take care of the management (they will charge a percentage of the rent – depending on the area it could be anywhere between 5% to 10%).

Set-up a simple excel spreadsheet to track your income (rent) and expenditure (interest portion of loan repayments, property management fees, rates, landlord insurance, etc). There are a number of deductions you can claim – a quick google search should reveal some lists of deductible expenses. At the end of the financial year, take your spreadsheet to your accountant.

I’d recommend you take out landlord insurance for the two years (a quick search on this forum will provide heaps of info on companies offering this service).

It sounds like a good opportunity.

Cheers

Jamie

Hi rz2010

Lenders don’t necessarily charge more for an offset account. However, a lot of the loans that come with an offset are part of pro packs which generally have an annual fee.

That said, lenders like AMP offer a really competitive product with an offset account and don’t charge any ongoing fees.

The banks are being very aggressive at present so if you suspect you’re not getting the best deal it’s an ideal time to look elsewhere.

Cheers

Jamie

Yep, I arranged 0.9% off for a client last week. If they don’t reduce your rate, there’s a couple of more competitive lenders that will happily take on new business and offer up to $1,000 to cover your exit fees from your current lender.

Cheers

Jamie