Forum Replies Created
I agree with you JacM. I don't want to move then have to live everyday with such worries.
So, what is the procedure of turning an IP into a primary residence then? Say if we move in after a year or two? Obviously, we will notify the insurance company that it will be owner-occupied so that they can modify their polices etc. But bank-wise, will they keep the loan the same?
Thanks, guys:)
If we are debating about the bank's decision to lend me money based on rental income and negative gearing, wouldn't I fall in the exact same situation in 12 months time or whenever I decided move in my IP? Would they have to 'reassess' my serviceability?
What is the difference between me moving in IP after 3 months, or me moving in after 12 months due to changes in circumstances? If my landlady decides she wants to sell her house in the next 6 months, and I decide to move in my own IP, will the bank come take the loan off me even though I have been making regular repayments? or sue me for mortgage fraud due to the fact that I use it as primary residence instead of renting it out?
I've read that some people do it the other way round. For example, they would go get an owner-occupy loan, utilize first home buyer grant, enjoy lower interest rate, then use the property as an investment and then claim tax benefits. Would that be considered a mortgage fraud too??
I'm confused now….I think I'm overthinking this lol.
Hi Shahin,
So you are saying that it's ok for me to live in this property even if I'm buying it using an investment loan. Is that correct?
Hi Jamie,
Yes, you're right. That pretty much summarizes the situation.
I actually don't have a plan to sell this property (at least not for the next 10 years). In fact, I was going to rent it out for a couple of years and then move in myself. But now the question is, can I move in now (if we have to move out where we rent now if the landlady sells the house)?
Hi Steve,
I haven't even thought about capital growth or anything like that. Basically, I saved up some money, went to the bank and asked if I had any chance of buying a property with this amount of the deposit. He did some figures and said I could buy an investment property and showed me how much I could borrow. I got a pre-approval, so I started looking. I asked him if I could just borrow to buy a house to live in. He said I could but I wouldn't be able to borrow as much and I would have to put my husband on the mortgage as well, which under his circumstance, would actually bring the borrowing capacity down even more. So I decided I'd buy an investment property and keep renting where we live now.
Then the idea came 'What if we want to live in this investment property?' which started this whole series of other questions whether it's possible.
Thank you very much for your replies.
At this stage, I'm not concerned about saving money by refinancing or anything like that. I just want to get in the property market. Basically, I am able to borrow a lot more on an investment property loan than on a normal home loan on my own. We can comfortably make the repayments on this investment loan as it isn't that much higher than the rent we've already been paying for the past few years. It's just nearly impossible to get a normal home loan because my husband is self-employed and has some credit card debts.
Originally, I wanted to rent it out. But we ran into our landlady and she sort of mentioned that her son wants her to sell the house we are renting so this idea has come up.
I don't plan to claim anything on tax, don't plan to do negative gearing, don't plan to do anything dodgy with claiming deductions. I just want to live in my own investment property and just make repayments, then in a few years, I can try to refinance and just get on a normal home loan (once my husband's finance is in a better position).
My biggest concern is that…would the bank be upset if I didn't rent out the property? If I made repayments on time (even planning to put a little extra in every month), would the bank ask for documents who was renting my property ? Would they ask me why I wasn't getting rent income in my bank account or getting any tax returns next financial year? Would they consider this 'lying' and take the loan off me if they found out?
In terms of bank asking for tenant document, I have asked my friend about it as she has a rental property that she is renting to her own parents with no agent involved. She said the bank doesn't care as long as the repayments are made. Is that true?
Thanks again.
