Hi propertygirl

Sorry to hear of your situation.

I’m with Richard.

I’ve been thinking about this since you posted it – and I’ve gone over a few lender policies but just can’t find a fit for it above 80%

Cheers

Jamie

Hi AVS

It all comes down to your overall plan.

If you’re looking to be aggressive with property investing than I’d be looking at spreading that deposit across multiple IPs and copping a bit of tax deductible LMI.

Interest only with an offset (just one offset against one loan is usually required) is the norm. There are certain circumstances where P&I can be a better option – and that’s usually when the borrower isn’t disciplined with money.

Cheers

Jamie

Hi Benny

I’d get on to Terry W.

He’s not in Brisbane but you should be able to deal remotely. He’s the man to talk to about your options.

Cheers

Jamie

jwareham1985 wrote:

It’s a tad dawnting for a newbie and I feel as I did when I had my first boy a few weeks ago, the similarity’s are that both my newborn son and how I go about purchasing a second property don’t come with a manual ;)

Buying property is easy peasy compared to raising kids :-) You’re in for a ride.

Cheers

Jamie

Richard Taylor wrote:

JP I go every year for the European winter so still got 5 months in Qld before I leave.

You should be heading there for Summer :-) – but then again, you get enough sunshine up your way so probably don’t need the vitamin D as much as us down south.

Cheers

Jamie

Hi John

Congrats on your first child :-)

It’s unlikely you’ll be able to purchase something for $500k+ at the moment due to the lack of a suitable deposit.

Your current home is already sitting at an LVR of 91% (unless it’s gone up in value a fair bit since a year ago) and $40k isn’t quite enough to fund the deposit/costs on a $500k+ purchase in VIC.

Cheers

Jamie

Hi Ben

If the second dwelling is going to be an IP then it would make sense to split the loan up so you identify tax deductible (IP loan) from non deductible (PPOR loan) debt.

It usually helps splitting it into ownership percentages when it’s sibling/friends borrowings – it makes it easier for each party to keep tabs on their finances. Keep in mind you’ll both be responsible for the total debt though.

Cheers

Jamie

Ben wrote:

Hey Jamie Im still having trouble getting my head around how it works. If I have 100k of actual equity, why can I only access 10k? Could you maybe give me an example of how the figures work?

If my home is valued at 450k and my loan is 350k If I want to buy an IP of say 300k then I would require 60k for a deposit of 20%. I thought in that situation I would be able to access that 60k of equity for the 20% deposit?

Hey Ben

No probs – here’s a rundown on the calculations.

Let’s assume you’re accessing equity up to 80% of your properties value.

We take 80% of the $450k value which equals $360k. We then subtract your current borrowings from that ($360k – $350k = $10k). So if you take your borrowings up to 80% you’ll be accessing a $10k equity release.

Similarly – if we access equity up to 90% of your properties value. We take 90% of the $450k value which equals $405k. We then subtract your current borrowings from that ($405k – $350k = $65k). So if you take your borrowings up to 90% you’ll be accessing a $65k equity release.

With the 90% option – not all lenders are keen on allowing equity releases at this level. If you haven’t paid LMI previously, you’ll be slugged with a large LMI premium. If you have paid it previously, it will be a small (relatively speaking) adjustment to your current LMI premium.

Cheers

Jamie

My wife self manages most of our properties.

Not to save money – it’s just that we had so many hassles with PMs we decided to do it ourselves.

As long as you treat it as a business and follow process – it’s not too difficult. You’ll need to be up with tenancy legislation in your state and be prepared to make tough decisions and have uncomfortable conversations from time to time.

It’s not for everyone – but can work well for some.

Cheers

Jamie

Keep saving and try to boost the deposit. 95% IP lends are harder to come by these days.

If you add some value to your current property, you might be able to access some equity from it.

Cheers

Jamie