I have a beach front unit appraised at 300k. I owe 115k on it.I would like to use the equity to buy another property about 350k. I’m working part time earning $550pw.The broker can’t negociate for me this amount at a fixed interest rate. Any suggestions are welcome.
Your total borrowings are probably going to be in the region of $480,000 if you could purchase this property ($115k + $350k + costs).
Your gross income is $550 p/week which is $23,400 after tax p.a. Rental income might be $24,000 p.a. (based on 8% yield). So perhaps that might be $20,000 after costs (at best). Therefore, total income of $43,400.
Your repayments will be at least $28,800 (based on 6% interest only). Or $33,600 if interest rates increase to 7%.
This leaves you with $9,800 to $14,600 p.a. to live.
Why do you think you can afford a loan of this size? Based on my assessment you can’t.
I would suggest not borrowing beyond your means otherwise it might come back to bite you.
Why not buy something smaller? What about partnering up with someone?
Just my 2 cents.
Cheers
Stu
Property & Finance News
at http://www.prosolution.com.auP.S. Sorry, not trying to be negative but just playing the devils advocate.
Aziz_ek
What is your plan for this new property? If you are buying it to renovate and resell for example you may consider a low doc loan, but if not I think Stuart has some very sound advise – you really need to do your sums, because watching overextended people lose everthing is not fun.
Stay keen though and welcome to the forum [
] – you’ve gone a long way already so have heaps of options.[
]
MelAziz_ek,
It is depend on how much will you rented for 350k. If the rent cover the loan then I think it is ok.
Kind regards
Chandara
[Keep going, you’re nearly reach the end of financial freedom]
] – you’ve gone a long way already so have heaps of options.
]
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