Having been through a divorce and a business partnership breakup, is it possible to finance a small property with no savings, moderate personal debt ($35000 previous business debt), no property assets and a high present income? Or will I have to save 5%? I have had several rental properties and my own house before all of this. Any help or suggestions would be most appreciated as I am keen to start again quickly.
skysthelimit
I’m surea million wrappers will be asking you to email them ASAP so get ready for it!
Remember though, with wrapping, someone will inflate the price by 20% before they “sell” the property to you, then you will pay higher than market interest rates, and if you default, you will lose any deposit, any repayments, and any improvements you have made to the proprty- actually, you’ll just lose the property! oh, and you’ll pay rates and water etc when you’re there too. Sound like a good deal to you?In a more traditional sense, your financial situatoin is obviously a vulnerable one. Given that you’ve “seen better days”, you’d understand that you need to be able to service the loan, and it really depends on where you live and what you want to buy. A 1-bed in sydney for 400K? or in a regional area? It’s hard to know what you’ll need given the small amount of informaiton we have. But if you go with a traditional lender, if you have less than 20% deposit, you’ll be paying Lender’s Mortgage Insurance which will just be paying something for nothing.
I think you need to save that 5% which shouldn’t be hard if you are a high income earner. If you can’t save 5%, it might be difficult for you to repay the loan anyway.
Good luck!
kay henry
As Kay said maybe you could wrap, I’m sure like everything else there are good and bad deals to be had. If your handy you might make up the 20% and then some to get yourself started again.
Good luck.
JoyHi Limits,
A broad question.
Thoughts .. serviceabilty of existing and potential loans.
Whether for PPOR or IP will determine level of borrowing as 70% rental income is a base from which to start.
Your sex .. serious here. It’s all about stats. If male with child support, tax on cf+ income props will reduce from 50 cents to 32 cents in your pocket as any loss is added back for child maintenance purposes. And that’s only for one child.
You have had property before, assuming your credit history is good I’m sure you know the ins and outs of what you can do.
A basic answer I know, with respect to your privacy, it depends on your motivation and circumstance.
Kind regards, Phil
Hi Limits,
Serviceability is what you need to address. If your thinking of buying a property see if you can add your personel debt (if the interest rate is high) on to the cost of the property. Some details of how much you can afford to repay each month/week, location you are looking at and type of residence( house or unit), should help get the ball rolling for some of the forumites who do wrapps. Remember if your going to wrap and you add your personel debt to the equation it may take a while before you have any equity in the property. Are you looking to just get your own home or create wealth?
C2
“Is it true the more you owe the more you grow until the bank steps in?”
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